Ultimate Guide to Lowering High-Interest Debt: Mortgage Refinancing

This is your ultimate guide to lowering high-Interest debt with refinancing your mortgage. Due to the harsh economic conditions caused by the pandemic, you’re looking for ways you can lower your expenses. If you can get rid of high-interest debts, you have the potential for significant money savings. That’s why you should consider mortgage refinancing.

The objective is to take another cheaper home loan to repay your current one. The problem is that you don’t understand how mortgage refinancing works. You also fear making a mistake that leads to you paying even higher interest rates.

To help you out, here is the ultimate guide to lowering high-interest debt through mortgage refinancing.

What is Mortgage Refinancing?

Refinancing is when a homeowner gets a new house loan to replace the current loan. Doing this means that you get new interest rates, payments, and terms. The essence of mortgage refinancing is to get favorable conditions like increasing the loan repayment term.

Before you apply for mortgage refinancing, review your current home loan terms, like the interest rates. Check if the lender will penalize you for clearing off the house loan early. These things will guide you on whether to refinance your mortgage or not.

When to Consider Mortgage Refinancing

Before you make the huge investment decision of refinancing your home loans, you must specify your goals. The idea is to highlight the things you expect to achieve. Doing this will allow you to find the best mortgage refinancing company.

To guide you, here are some of the things to help you know when to consider mortgage refinancing:

Lower the Interest Rates

One of the biggest motivations for refinancing a home debt is to get lower rates. However, you must decide the percentage drop in the interest rate worth considering a refinance. For instance, you should check how much money you’ll save from a 0.5 drop.

If you’ll not get any significant savings, then it’s not worth it to refinance the house loan at the moment. The reason is that you’ll pay different upfront fees when applying for mortgage refinancing. The money you save from paying the lower interest rates should therefore be more than these fees.

Debt Consolidation

Maybe you’ve two mortgages on either one or more houses that you’re paying at the moment. It’s a headache keeping track of these different payments. Also, these mortgages may have varying interest rates and repayment terms.

You need to find a way to combine these two mortgages into one to ease your work. That’s why you should consider refinancing your house to pay off these separate loans. Doing this allows you to consolidate the debts and lower the interest you pay.

If you have a piggyback mortgage that you’re struggling to keep track of the payments, reach out to our company. Our specialists will help you calculate the interest you’re paying on both loans and advice how you can lower this expense. We offer friendly mortgage refinancing terms to help homeowners looking to combine two mortgages.

Cash-out Refinance

Most homeowners don’t realize that they can tap into their home equity to raise money. They assume that they must sell the house to access this money. Also, you’re against equity borrowing as this will increase the number of loans you hold.

The great news is that there is an easier way of getting this money through house mortgage refinancing. The idea is to get the money you can use for other investments like paying college fees for your kids or starting a business. Reach out to our company, and we’ll guide you on how you can access your home equity.

Adjust the Mortgage Repayment Term

As things change, you may want to adjust your mortgage repayment term to suit your current situation. For instance, you may desire to pay off the loan in 20 years instead of 25 years. Or you may want to increase this repayment term to lower the monthly installments.

Most lenders are unwilling to negotiate a change of home loan repayment term with the homeowners. The easier way of doing this is by getting a refinance on your home loan. When getting the new loan, you have the leeway of choosing a favorable repayment term.

Move to a Different Type of Mortgage

When getting a home loan, you can either choose a fixed or adjustable interest rate. With fixed, the interest rate will be the same throughout the life of the loan. Whereas with adjustable interest mortgage (ARM), the rate will change depending on the market conditions.

To enjoy interest savings may want to change your mortgage from fixed to adjustable and vice versa. The problem is that most banks don’t allow you to make this change. That’s why you should go for mortgage refinancing to achieve this goal.

Examine Mortgage Refinancing Process and Costs

When you decide to refinance your home loan, you must check the costs you’ll incur and the process to follow. The idea is to compare the terms of various home refinancing companies near you. Doing this will assist you in finding a company with friendly terms that meet your needs.

Find a transparent company on all the closing costs you’ll incur when refinancing your home debt. The reason is that this amount will eat into the money you save from getting the lower interest rates. Our company has affordable closing costs.

Consider Mortgage Refinancing to Move Away from High-Interest Debt

As a homeowner, you’ll struggle to repay a high-interest debt due to current economic difficulties. That’s why you need to explore various options to lower debt. Mortgage refinancing is one of the best solutions to consider.

Reach out to our company now, and we will advise you on how to refinance your home loan. Our specialists will guide you to know the interest rates on your current mortgage. The idea is to help you decide whether it’s worth it to get a mortgage refinancing at the moment or not.

Also, we’ll help you tap into your home equity and get money for other investment opportunities.

Call us today, and our friendly representatives will guide you more on the range of services we provide.