May 12, 2020 / Mortgages

Big Benefits of Refinancing Your Mortgage

Mortgage interest rates are hitting historic lows, and homeowners are wondering whether now is good time to refinance. The answer to that question depends on your individual circumstances, but refinancing usually provides at least one of these benefits.

Lower Payments

If you decide to refinance your mortgage with the same term as your original loan (keeping a 30-year term, for example), your minimum payment should be reduced each month. This is due to a combination of a lower interest rate on your new loan and less principal amount due (thanks to the monthly payments you made on your previous loan). Another way to reduce your overall minimum monthly obligations, is to utilize the equity in your home to possibly consolidate personal loans and credit card debt. Please call a Utah First mortgage loan specialist to explore all your options and see what’s right for you.

Lower Interest

The most common reason to refinance your mortgage is to reduce your interest rate. Since rates are better than ever, your timing couldn’t be better. In addition to lowering your monthly payments, lower interest rates give you the opportunity to pay off your mortgage at a faster pace. With the lower amount of interest accruing and maintaining a similar mortgage payment to your current mortgage, you should be able to pay off your mortgage years sooner than originally anticipated. Either route will result in a significant interest savings over the life of the loan.

Overall Benefits

Refinancing your mortgage can be a great benefit. With rates at historic lows and house values at all-time highs, consulting with a Utah First mortgage loan officer to restructure your finances to best fit you and your family’s needs, could result in lower monthly payments and/or debt being paid off at a faster pace.