When an original mortgage is replaced by a new one, it’s referred to as mortgage refinancing. What does this mean exactly? It means your initial loan has been successfully settled, and now you can create a second mortgage.
A good credit score is an advantage when refinancing your mortgage. More so, the prevailing economic climate may make it difficult for homeowners to make home mortgage payments due to existing high interest rates. This is where mortgage refinancing comes in.
The benefits of mortgage refinancing:
Better Mortgage Rates
Interest rates normally fluctuate depending on the economic stability of a country. On the off chance that the rates have fallen, your mortgage will be subject to the current rates if you refinance it. This enables you to save money that you would have spent paying higher interests on the previous mortgage. Likewise, if you maintained a good credit score over the years, you are eligible for reduced rates of interest.
Predictable Monthly Costs
When refinancing, you can change your plan from an adjustable-rate mortgage to a fixed-rate loan. This will lock the remainder of the mortgage you have to your new rate. This way, you are able to properly budget yourself and avoid missing any payments which may damage your credit score.
Low Monthly Payments
Since you will be paying lower interests by refinancing your mortgage, the monthly payments that you make will likely reduce. If you want to lower the rates even more, you can simply extend the payoff date. That way, the amount you will have to pay in principle every month will reduce.
Reduce Your Mortgage Repayment Term
When you refinance your mortgage, you can reduce your initial home plan to a shorter one. You will save more money this way by avoiding the interest you would have paid for a loan that takes more time to pay off.
Now You Know
Contact us today to discuss refinancing your mortgage.
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Checkout our Mortgage Basics page or our FAQs section.
Preferred Mortgage Corp. of NY is a mortgage broker located in Rochester, NY.
We provided mortgage services throughout New York State including Rochester, Buffalo, Syracuse, Albany, and New York City. We’re also licensed to do business in Florida. Click here to contact us about our mortgage services.
Preferred Mortgage Corporation of New York – NMLS # 44812 Registered Mortgage Broker – NYS Department of Financial Services & Licensed Mortgage Broker Florida Office of Financial Regulation Loans Arranged Through Third Party Providers