A mortgage is probably one of the biggest and most important financial obligations you can ever get into during your lifetime. The right mortgage can not only help you own your dream home but also help you realize your financial goals. However, there might come a time when you may consider trading your current mortgage for a new one. This is where mortgage refinancing comes in.
Basically, mortgage refinancing is the process of getting a new mortgage to pay off an existing one. You may enter into a new mortgage with your current lender or the existing one. But is mortgage refinancing always a good idea?
Here are two instances when you may consider refinancing your mortgage.
When you want to reduce your monthly payments
If interest rates have dropped since you signed up for your current mortgage, you might want to refinance into a facility with a lower rate. This way, you will lower your monthly payments and eventually pay less for your home loan.
Likewise, if you have experienced a significant drop in your income, thus unable to keep up with your current mortgage amounts, then you may consider refinancing to extend your loan term through reduced monthly payments.
When you want to pay higher monthly payments
If your income has improved and you can comfortably afford higher monthly payments, you may consider mortgage refinancing. This way, you will clear your loan faster and save thousands of dollars in interest payments in the process. And once you’re done with your mortgage, you can have peace of mind knowing that the home is 100 percent yours.
Protecting your interests
Mortgage refinancing can be beneficial in a number of ways. However, it also comes with its demerits. Learning more about Ohio real estate law can help you protect your rights and interests while refinancing your mortgage.