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I feel certain that if you have a mortgage loan you’ve probably thought about refinancing it from time to time.

There are many reasons to refinance your loan. We will discuss them below.

Click here to Request a free mortgage analysis from an Alliance member

What is Refinancing?

Refinancing is when you take your current mortgage and get another loan to replace it. People refinance their mortgage to get a lower interest rate or monthly payment, get a shorter or longer term, among many other reasons.

When Should You Refinance Your Home Loan?

There are many different reasons people choose to refinance their mortgage. If your interest rate is over 6% then you should look into refinancing into a loan with a lower mortgage rate. If you have an adjustable-rate mortgage and the initial rate is set to adjust upward soon, then you can refinance into a fixed-rate.

Top Reasons to Refinance a Home Loan

  • Lower interest rate
  • Lower monthly payments
  • Cash out debt consolidation
  • Converting an ARM into a fixed-rate
  • Pay your mortgage off quicker by changing loan term (30-year into a 15-year)
  • Removing mortgage insurance
  • Make home improvements

Lower Interest Rate

One of the most common reasons homebuyers decide to refinance their loan is to get a lower interest rate. Interest rates on the rise in the future, so you should speak with an Alliance member to see if a refinance would benefit you!

Lower Monthly Payments

When you refinance your home you can obtain a lower mortgage payment

Cash Out Debt Consolidation

By consolidating all of your debt, you can lower your overall monthly payments.

Converting an ARM Into A Fixed Rate Mortgage

If you have an adjustable rate mortgage (ARM) and your interest rate has adjusted or will adjust soon, then you should look into refinancing into a fixed-rate mortgage note.

Pay Your Mortgage Off Quicker BY Changing Loan Term

One advantage is that you can refinance into a shorter loan term. This change in loan term will increase your equity in the property by accelerating the amount of principal that is paid monthly.

Remove Mortgage Insurance

Most mortgages require (PMI) if the loan-to-value ratio is over 80%. For conventional mortgages PMI will automatically drop off after the loan-to-value (LTV) ratio drops to 78%.However at 80% LTV, you can request that the PMI be removed.

2019 FHA rules require borrowers who put less than 10% down to carry PMI for the life of their FHA loan. If your LTV is below 90%, then the PMI falls off in 11 years.

The only way these homeowners can remove PMI is by refinancing out of an FHA loan into a conventional loan.

Once your loan-to-value ratio drops to 80% you should contact a lender about refinancing to drop PMI.

Make Home Improvements

Depending how long you have had your mortgage or if property values have increased in your area, there’s a good chance you have some equity in your home. By Refinancing, you could use this available equity to accomplish your home improvements.

Click here to Request a free mortgage analysis from an Alliance member

How do I Refinance

Decide Why You Want To Refinance & Speak To An Alliance Member

A lot of homeowners make the mistake of refinancing with their current lender/loan servicer. This is a mistake because loan programs, interest rates and lender fees differ from bank to bank. Just because one lender says no, doesn’t mean that the Alliance lender will say no!

Check Your Credit

Your credit rating will determine the interest rate you get when refinancing. The higher your score, the better rate you will get. You can get your free report and scores from several different websites.

Please review your credit report for any errors. If you find errors on your credit report, you will want to discuss them with the three major credit bureaus

Click here to Request a free mortgage analysis from an Alliance member

Refinancing with Bad Credit

Having less than perfect credit is doesn’t mean you can’t refinance your home loan. There are some programs and mortgage companies that will help you refinance your mortgage with less than perfect credit. Just because one lender says no, doesn’t mean an Alliance member says no!

Click here to Request a free mortgage analysis from an Alliance member

mortgage refinance infographic

Refinance Recap

Refinancing your mortgage loan can potentially save you thousands of dollars over the life of the loan, but it’s not always a great idea.

Top Reasons to Refinance a Home Loan

  • Lower interest rate
  • Lower monthly payments
  • Cash out debt consolidation
  • Converting an ARM into a fixed-rate
  • Pay your mortgage off quicker by changing loan term (30-year into a 15-year)
  • Removing mortgage insurance
  • Make home improvements

Are you ready to refinance your home loan?

Click here to Request a free mortgage analysis from an Alliance member