Is Loan Refinancing is Right for You?

HomeBlogIs Loan Refinancing is Right for You?

With the recent low interest rates, many have taken advantage of the chance to become homeowners. If you are already a homeowner, you might be wondering if now is a good time for loan refinancing so that you can take advantage of a lower interest rate.

Is Loan Refinancing is Right for You?

It makes sense if you can slash your monthly mortgage payment. For example, if your current rate is above 3.5%, you could drop your payment by $200 to $300 per month. Another potential outcome is that you could swap your 30-year mortgage for a 15-year mortgage and not feel quite the pinch of a higher mortgage payment for the luxury of paying off your home sooner.

One thing to think about before you take the loan refinancing step is whether you’ll be set back to the beginning of a 30-year loan despite having already paid for several years. If your plan was to pay off your house before retirement, for example, and this would push you beyond that, it could be worth looking into whether you could swing a 15-year mortgage instead so you can continue with your financial goals.

Loan refinancing isn’t the only way to take advantage of lower interest rates. If your lender is amenable, you could go with loan modification instead. This keeps the rest of your loan terms intact. This isn’t the best solution for everyone, however, as it can adversely affect your credit score. Unless you are behind in making payments, loan refinancing is usually better than a loan modification.

If you would like to know more about loan refinancing and learn about the options available to you, reach out to us at Harbor Mortgage Company. We will guide you through the process so that you get the outcome you expect and that is in your best interest.