Refinance, 13 Reasons Why

1. To Get Cash

A cash-out refinance is the most convenient way to access your home equity. Use the money to pay for higher education, make home improvements, invest in an income property, or pay off debt. Today's low rates make a cash-out refi a smarter choice than taking out a personal loan. 

2. To Get Rid of PMI

If your loan-to-value ratio (LVT) has decreased, refinancing your loan could eliminate private mortgage insurance (PMI). Combining the savings from getting rid of PMI with a lower rate means even bigger savings.

3. Your Borrower Profile Has Improved

Your financial health has a significant impact on your loan terms. If your credit score has gone up and you've removed negative items from your credit history, you probably qualify for a better rate.

Not sure if this applies to you? Contact us for a free review!

Pauline Lee | (617) 965-1988 x205 | Pauline@indmortgage.com | www.indmortgage.com

4. To Switch To A Conventional Loan

Maybe you weren't too keen on the original mortgage, but you agreed because it was the only one you could qualify for. Now that you're in a better situation, you have more home loan options to choose from. Low rates combined with no PMI makes conventional home loans one of the most popular loan products in this situation.

5. To Reduce Your Loan Term

Changing your 30-year mortgage to a 15-year loan saves you money thanks to the lower-interest-rate that you pay over the shortened loan term. While this is a more aggressive way to pay off your mortgage, your savings could mean thousands off the life of the loan. 

6. To Increase Your Loan Term

Maybe the opposite suites you better. Maybe you started with the idea of paying off your mortgage as quickly, but now making large payments isn't feasible. Refinancing to a 30-year term can ease the burden by reducing your monthly payments into one that you can comfortably afford. 

7. To Change To A Fixed-Rate Home Loan

A hybrid adjustable-rate mortgage (ARM) is a mortgage product that offers a low fixed rate for a time. After that, your rate adjusts to current market rates. Many homeowners refinance into a fixed-rate mortgage right before the first adjustment to avoid a significant increase in costs. 

Depending on the previous rate you qualified for, the current one might be even more favorable than it was with your original ARM!

8. To Change into an Interest-Only Loan

Refinancing into an interest-only loan offers some of the lowest monthly payments. If you need to free up your monthly cash-flow, an interest-only mortgage might be just what you need. 

9. To Buy Someone Out

Ready to fly solo? If you have a co-borrower and you now need to remove them, refinancing can do that. This is often the case when it comes to divorce or when a co-borrower was required to qualify.  

10. For Investment Protection

Some homeowners like to take out some of their equity even just to set aside for a rainy day. Home prices adjust all the time. So if you see your home value has gone up, you might want to access that equity while it's on the upswing. 

11. To Lower Your LTV

On the other hand, you may have recently inherited some cash and are looking to reduce your mortgage balance. Instead of just applying that lump sum into your current loan, consider refinancing into a shorter-term loan as well as use the lump sum. This way, your rate will be lowered, your loan will be paid off faster plus your monthly payment may not even increase!

12. Consolidate Debt

Have a second mortgage? Refinancing can consolidate your loans into a single one. A second mortgage comes with higher interest rates, so consolidation makes sense if you want to both save money and the headache of dealing with several mortgages.

13. Take Advantage of A Loan Program Before it Expires

Some specialty loan products are available only for a limited time. If you want in on that deal, refinancing your current loan is how to do it. Want to learn more about what specialty loan products you qualify for? Contact us! We're the mortgage specialists, and we're ready to answer all of your refinancing questions.

Pauline Lee | (617) 965-1988 x205 | Pauline@indmortgage.com | www.indmortgage.com