Home Refinancing: When's the Best Time to Do It?
posted on Thursday, April 22, 2021 in Financial Tips
Home refinancing is the process of paying off your existing loan and replacing it with a new one. It can be used for a variety of purposes, including obtaining a lower interest rate and reducing monthly payments. However, like other loan programs, it’s important to explore your options first. In the meantime, here are other cases where home refinancing may be suitable for you:
Reducing Your Loan Length
Refinancing a home is great for people who have previously taken out a 30-year mortgage but now want to pay off their property faster. It allows them to refinance their existing mortgage and take out a loan with a shorter term. However, it’s important to note that while shorter-term loans offer lower interest rates, they also come with higher monthly payments. Consider this option if you have a sizeable budget.
Removing Private Mortgage Insurance (PMI)
Private mortgage insurance or PMI is a type of home insurance required for individuals taking out a conventional loan but can’t afford the 20% down payment. However, if you refinance to pay off the principal, the PMI can be waived, and your monthly payments will be reduced.
Switching to a Different Type of Loan
Refinancing is also recommended for homeowners who want to switch to a fixed-rate mortgage. You’ll be able to pay off your existing adjustable-rate loan and apply for a fixed one. This allows more stable interest rates and fixed monthly payments, regardless of the market situation.
Refinance Your Mortgage With Help From a Trusted Credit Union
If it’s your first time refinancing a home, Community 1st Credit Union has you covered. Our capable loan officers will walk you through the process and develop a loan program that works best for your situation.
You can also check out our other products, including fixed-rate mortgages, VA loans, home equity loans, and adjustable-rate mortgages. If you’re a first-time home buyer, we also have the right program for you. For questions or concerns regarding our services, please reach out to us today! Our loan officers will be happy to assist you.