With historically low mortgage rates, refinancing to a shorter term loan is a great option for helping pay down your mortgage debt. In this case, you would work with your broker to renegotiate the terms of your loan and ultimately pay less in interest and shorten the life of your loan. On the other hand, refinancing to a shorter term loan will naturally decrease the length of your repayments but what are the other pros and cons?
- Lower interest rate. If you are moving from a 30 year to a 15-year loan, the interest rate will be lower since the bank is taking less risk by loaning money for a shorter period of time.
- Increase equity faster. This method naturally allows you to build equity faster due to the shorter life of the loan.
- Change your loan type. If you have an adjustable rate loan, refinancing allows you to convert your loan and therefore create a more stable repayment environment.
- Locked in to new monthly repayment schedule. If you are unsure about whether you will be able to maintain this level of repayment schedule, you might want to rethink refinancing.
- Cost of refinancing. Will the costs of refinancing outweigh the benefits? This might be the case if you are not planning on remaining in your home long term.
- Long term saving strategy. How will the new repayment schedule effect your long term retirement and other savings strategies?
Ultimately, only you can make the right choice for investing in your future. For assistance or more information in making this decision, contact our award-winning mortgage broker Texaslending.com in Dallas, Texas. With almost 20 years of experience, their experts can help you determine if refinancing your mortgage to a shorter term loan is right for you.
In addition, to refinancing, they can assist with getting you pre-approved to purchase a new home.
Their expert mortgage consultants will discuss your home ownership goals and help you understand your mortgage loan options. Getting pre-approved for a home is the first step in buying a home and they are here to help you from step one to closing. You can use their easy online mortgage process, and get some of the lowest rates in Texas.
Contact them today! 972.387.4600 https://www.texaslending.com/refinance-home/