“To refinance or not refinance? That is the question.” So that’s not the exact question William Shakespeare wrote in Hamlet, but it is applicable to you and many other home owners today. Refinancing at the right time could save you thousands of dollars in interest payments over the life of your mortgage. But it also has other benefits too. Why should you consider refinancing? While it depends strictly on your financial situation and the terms of your original mortgage agreement, there are a few ways refinancing your mortgage could benefit you:
- Lower interest payments- if interest rates are lower than when you first got your mortgage, you can save a lot of money over the life of the loan. Build equity faster- if your income has increased, you may want to consider making a higher payment or switching to a shorter term. This allows you to build equity faster.
- Change loan type- if you started out with an adjustable-rate mortgage, you may want to switch to a fixed-rate mortgage because of the additional security from fluctuating rates.