Home Refinance

Sometime ago, you had to worry about mortgages, long-term loans, and spiking interest rates. With easier refinancing options and mortgage rates dropping to a record low, the time is now to evaluate your financial situation and decide whether a new home loan or home refinance would be better for you. Refinancing can be the right choice for you if it lowers your mortgage rates, reduces your loan term, or saves money. If done wisely, home refinance can be a great option to improve your financial situation and credit score while easing your loan burden.

The COVID-19 pandemic has created financial uncertainty for everyone. In this turbulent time, getting a new home loan or refinancing the one you have can ease your burden. A recent study has reported that refinancing a mortgage has increased by 38% more than in previous years. While most economists suggest that getting a mortgage is more affordable now, this rise is primarily due to lower interest rates and other deciding factors. There are many other benefits associated with refinancing a loan.

The biggest and most desired benefit of a home loan refinance is it frees up cash for home improvements, business investments, tuition, and other expenses. A home refinance also provides you with a good opportunity to pay off your debt reasonably since home loans are affordable, and mortgage rates are generally lower than that of credit cards, business loans, student loans, and other types of loans. Simply put, home refinancing is a great way to pay off your high interest loans by converting them into a lower interest rate.

How Does Home Refinancing Work?

The most common method to refinance is to find a new lender to satisfy the unpaid amounts that you owe your existing lender and pay off the outstanding debt with interest. Once you have found the right lender that offers a great refinancing deal, you can start the application process with them by filling out the necessary paperwork. Once approved, the new lender will pay off your existing loan and take over the outstanding debt. You would then send your monthly payments to this new lender.

When you choose home refinancing, you replace the one you already have with one that offers better loan terms than you had with your previous lender. If your credit score is very bad or you are unsure what benefits refinancing your mortgage can offer you, read on.

Why Refinancing Has Become A Popular Financial Move?

Refinancing Becomes Easier and More Affordable

The rates of home refinancing have dropped to a record low in recent years. Lower interest rates and affordable home loans have ignited the housing markets, and the demand for mortgages has significantly risen.

Reduced Loan Term

Millennials are reported to live a more financially stable life than ever. That might be because, for many, their financial situation has improved, and they are now able to pay off their loans in a shorter term and can afford higher monthly payments. In this instance, refinancing your home and switching to a short-term home loan can help you pay off your loan quickly while saving you a lot of money.

Saves Money & Frees Up Cash

The COVID-19 pandemic has hit the global marketplace, leaving many without cash. This disaster has forced people to rethink and strategize their current financial portfolios. This sudden blow to businesses has inspired many to invest in real estate to take advantage of the equity increased over time.

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How Can You Benefit From A Home Refinance?

The most obvious reasons to find a new lender would be to lower your loan interest and have more affordable monthly payments. With falling interest rates, a newer loan would provide a lower financing cost as it would lower the monthly payment and overall cost of your loan.

Pay Off Your Debt At A Lower-Interest

Your financial condition might have changed since you first acquired the loan, and it might be time for you to rethink the monthly payments. If you are now more financially stable, you could opt for higher monthly payments and a shorter-term loan. On the other hand, you could choose to pay off the debt over a longer term which will free up more cash for your daily needs by lowering the monthly payments. A new lender could provide you with a better loan option that would suit your monthly needs and current financial situation.

Restructure Your Monthly Payments

This might sound crazy, but it is possible if you plan your refinance wisely. For instance, if you refinance your home with a bigger loan than the one you currently have, the new lender could provide you with some extra cash at a comparatively lower interest than business loans. You can use this money to invest in other short-term portfolios. Make sure you evaluate the investment and the new loan costs carefully.

Make Money From Your Loan

If you got your new loan, you handled your finances well, paid your monthly payments on time, over time, your credit score might have improved. This improved credit score can lead to you getting a loan at a lower-than-average rate. Your capacity to pay off your debt is a major determining factor in your mortgage interest rate. Because of your improved financial situation, you can get a better loan deal by refinancing your current home loan. With an improved credit score, you can negotiate a better new mortgage with a lower interest rate. This can further improve your credit score since you now have extra cash from the refinance deal to pay off other debts as well as your credit card bills.

Make Use Of Your Improved Credit Score

How To Find The Best Refinancing Deal?

If you are looking to refinance your home, you need to research how to choose a lender who would provide a better loan with affordable monthly payments and a lower interest rate. Finding a deal that costs less and offers the lowest interest rate might be the most important goal for any homeowner. There are many other factors that one might also assess before making a refinancing choice. Hidden charges, miscellaneous fees, long-term costs can do more harm than good, so you must make your decision carefully while applying for a home loan.

Finding a good refinancing deal would be easy if choosing a mortgage was like shopping for groceries online by simply clicking on icons and checking prices. But, in the case of mortgages, you must assess, calculate, and then evaluate your loan’s overall cost. 

To find the best refinance deal, you need to get quotes from all lenders, and then you have to evaluate what kind of offers are available to you. The internet provides lots of information, but you cannot always make a proper decision based on numbers. You need to carefully assess everything from your own refinancing goals to debt paying capacity, credit scores, and the terms associated with the supposed mortgage lender.

Before you start looking for a good mortgage rate, you should first determine your reason for refinancing – is it just because mortgage interest rates are lower than ever, or do you want to remodel your monthly payments and loan term? Once you have decided on your refinance goal, you can take advantage of one of the best home loan options that satisfy your needs.

Walking into a local bank isn’t the way to find a perfect lender for you. There are too many options to check out in person. A virtual tour of a lender would provide you the needed information. It is not as impossible as it sounds.

Finding a perfect mortgage rate to refinance your current loan might seem complicated, but we have made it easier for you. We have taken away the hassles to make the VA home loan process easier by researching the best mortgage deal that will save your hard-earned money. Our best home loan adviser statistics and figures will help you find a rate for your current financial situation so that you can choose a suitable refinance option. Low closing costs, flexible terms, lower-than-expected interest rates, a low origination fee, minimum documentation, a friendly interface, and valuable perks are some good reasons to choose us as your refinancing partner.

Different lenders have different policies to determine your interest rate, mortgage term, and overall loan cost depending on your current employment status, financial situation, owned assets, as well as your credit score. It might be a complicated process to find a suitable deal for you that benefits you in terms of monthly payments, interest rates, and overall costs, but we are here to help you find the right home loan. It might seem to be a time-consuming process, but it is easier than you think. Even if it takes a few minutes, it is a great investment of time that would eventually turn your time into money sooner or later. Our online resources provide the best possible statistics for you to assess, calculate, estimate and evaluate how the new loan will reap great rewards.

You need not share your personal financial information with us. You can browse through our stats, figures, and graphs to understand the new loan. If you are confused, you can contact one of our customer care associates who would love to help you find a good VA home loan and the right home refinance deal.

Contact us for the best offers and refinance deals that will help you build the home of your dreams, worry-free!

Frequently Asked Questions

  • As we know that refinancing comes with costs like application fees, taxes, and closing costs on your refinance mortgage. One important thing to consider is the “break-even point.” It is the time when monthly savings created by the mortgage refinance offsets the cost of refinancing.

  • A high credit score can greatly help you as it not only helps you get approval for the refinance but can get you lower interest rates as well. For instance, a person with a loan size of $300,000 and a credit score of 620 may end up paying $3,000 more a year in interest payments than a person with a credit score of 780. In other words, the higher the credit score, the lower would be the interest rates.

  • Most of the lenders allow for early payment of your mortgage. So, if you want to pay your loan in 15 years that was originally for 25 years, you can do so. This will help you save on interest rates. If the circumstances change and you are no longer able to pay high-interest rates, you can revert to your original term of 30 years.

  • Before you decide to refinance, you need to consider whether it makes sense. The offers and the Interest rates keep on changing in the finance market and so does property value. So before making a final call, it is always good to do thorough research and make a smart move accordingly.