A home is an important investment and one of the biggest purchases you can make in your life. It costs a lot of money, and if you’re looking for property in the Los Angeles area, a home loan is often the only way to afford it.
If you already have a mortgage, one option to consider that may help you manage your finances better is to refinance it. Never heard of this? Refinancing a mortgage means paying off your existing loan with the help of a new one at a better rate.
3 Good Reasons to Refinance Your Mortgage
Aside from the money, you’ll save on interest, here are three reasons that refinancing your mortgage can be a good idea:
- You can shorten your loan term and lower your monthly payments. Refinancing offers you the opportunity to pay your mortgage off faster and save a lot of money in interest by refinancing your loan. You could go from a 30-year home loan to one with half the term—15 years! Best of all, mortgage rates on 15-year loans are significantly lower than on 30-year mortgages. You can get lower monthly mortgage payments, especially if your refinanced mortgage has the same payoff date as your old home loan. In addition, you can reduce your monthly payments by extending your payoff date past your current one. This option prevents you from making any drastic changes in the way you handle your finances to shorten your term. You also don’t have to worry about your monthly payments increasing if rates should rise. If you currently have an adjustable-rate mortgage (ARM), consider turning it into a fixed-rate loan to lock in your rate for the remainder of your mortgage.
- You can borrow money. If you need quick cash to deal with a financial emergency, you can take advantage of refinancing your mortgage with a cash-out refinance and borrow against your home equity to get funds for any purpose. This works when you receive a check at closing. It can be a cost-efficient way to obtain the funds you need since mortgage rates tend to be lower than other types of debt and tax-deductible. To learn more about the process involved, reach out to us, your go-to mortgage brokers in Los Angeles. Our team is led by Shannon Christenot, a professional with more than 20 years of experience in home loans. She has built a huge network of lenders over the years, and she can help you address your refinance needs.
- You can remove a person from a mortgage. Some inevitable circumstances like a divorce can cause someone originally signed onto a mortgage to get freed from their financial responsibility for the loan. When this happens, the only way to get them off the mortgage is by refinancing. This option can also be used to remove the name of a co-signer whose support is no longer necessary and wants to be freed of liability.
Shannon Christenot for Mortgage Refinancing in Los Angeles
Refinancing your mortgage is a good idea because aside from letting you reap the benefits listed above, it can be a cost-effective way to improve how you handle your finances and bring your debt under control. Just make sure you use it wisely and hire experienced mortgage brokers to find out if this is the right option for you.