If you see that you can get low-interest rates on mortgages right now, you might wonder if you should refinance your mortgage. Refinancing offers a way to get a new loan with new terms, and it offers some benefits for most people. Are you interested in learning more about these benefits? You can learn about them by talking to a mortgage lender, and here are three key benefits that the lender might discuss with you.
1. You Can Save Money on Your Payments and Loan Total
The number one benefit of refinancing your mortgage is saving money. You can save money in several ways by refinancing your loan. The first way is by getting a lower interest rate. A lower interest rate results in paying less interest to your lender. This benefits you in several ways. First, it reduces your monthly payments, as your monthly payments include paying both principal and interest. Secondly, it decreases the total amount of money you pay to the lender for the loan. If you want to save money on the total costs, this is the way to go. If you want to have a lower monthly payment to make your mortgage more affordable, refinancing can also help you achieve this goal.
2. You Might Eliminate Your Private Mortgage Insurance
Some people must pay private mortgage insurance (PMI) with their loans. Paying PMI increases your monthly mortgage payments you owe your lender, but it is not always easy to get rid of the PMI. Refinancing, though, might offer a way to eliminate it. If you would like to find out if refinancing will help you achieve this goal, talk to your lender. The answer may depend on the loan type you use and the amount of equity you have in your house.
3. You Can Get a Longer or Shorter Loan Duration
The other benefit to consider is that refinancing offers a way to get a longer or shorter loan duration. Do you want to pay off your loan faster? If so, you can choose a shorter duration. If you want to find a way to decrease your monthly payments, you might want to extend your loan to a longer duration.
While these three benefits stand out among others, they are not the only benefits you can experience through refinancing. You can talk to a lender to learn more about the refinancing process and other benefits it offers.
For more information on how to refinance your mortgage, contact a company like Dominion Capital Mortgage.