6 Reasons to Refinance

Is your mortgage still serving all your financial needs? Or do you sometimes wish you could make some changes? Refinancing gives you a way to potentially make some of those changes. In this post, we go over some common reasons to refinance.

1. Interest rates have gone down compared to what you are paying. One of the biggest reasons to get a refinance is if you are paying higher mortgage rates than current rates. Refinancing may allow you to start paying the same rates you would if you bought a house today. You can do this whether you have a fixed or adjustable mortgage rate. If you have an adjustable rate that ballooned, consider refinancing to a lower fixed rate. If you have fixed rate that has stayed high when rates have dropped, simply refinance to today’s lower fixed rate.
2. Your qualifications have improved. If your credit score or income have increased relative to when you bought your home, you may be able to qualify for better rates than you did then. The same may be true if your debt-to-income ratio has improved, or you have more assets.
3. You have debts to consolidate. You can use a refinance to consolidate high-interest debts. Get a cash-out refi and use the funds to pay off the high-interest debts. That will leave you with just the mortgage to pay off, with its lower interest rate.
4. You want to remove mortgage insurance. If you did not put 20% down (or more) on your mortgage when you bought your home, you are probably paying mortgage insurance. Some types of loans have mortgage insurance permanently until you refinance. Doing so can remove this monthly cost and allow you to pay off your mortgage more quickly going forward.
5. You want to make other changes to your loan. Speaking of paying off your home loan more quickly, you can also adjust the term of your loan when your refinance (you can make it longer as well, if you need to lower your monthly payments). You can also make other changes when you refinance, such as switching the format for your mortgage rate from fixed to adjustable or vice versa.
6. You are getting divorced. If you are divorcing a partner who owns the home and is listed on the mortgage with you, you need to refinance your mortgage to get them removed from the mortgage (the same is true if you are the one trying to get removed from the mortgage). Be aware that the party who refinances the mortgage to list themselves as the sole borrower will be exclusively responsible for paying off the remaining balance. They also will need to buy the other person out of their share of the home.

Refinance Your Mortgage in Ohio

Not sure whether a refinance will help you meet your financial goals? During your consultation, we can discuss your individual scenario with you in detail, going over the costs and benefits of a refinance. Please contact us at (740) 624-8091 to schedule your refinance consultation.