Mortgage refinancing can give you breathing room by lowering your monthly payments and saving you money over time. At the same time, refinancing can get a little complicated, especially if you have a poor credit history or don't know what to expect.
When you refinance, you're essentially taking out a new loan for your property. Ideally, this new loan will have better terms than your previous loan. This depends on several factors, including your current mortgage interest rate, how much equity you have in your home, and your credit rating at the time of your application.
Below are the five main benefits that you get when you refinance your home loan with Great Southern Bank:
1. Getting Lower Interest Rates and Monthly Payment
Setting a lower interest rate can help you as a borrower avoid paying hundreds of dollars in interest for your loan. Lower interest rates also often mean lower monthly mortgage payments. With this interest rate savings, you can pay off other high-interest debt, add to your savings account, or invest more dollars for retirement.
2. Pay Off Your Mortgage Early
Some borrowers can shorten the period of their loans by refinancing. A borrower can move from a 30-year loan to a 20-year loan without significantly changing their monthly mortgage payment by lowering the interest rate. The loan pays off in a short period so that you can save on interest payments.
3. Get a Fixed Interest Rate
Adjustable Rate Home Loan (ARM) borrowers often replace their loans with new fixed-rate loans. This is especially true when an interest rate adjustment phase is imminent and existing loans can be refinanced to obtain lower fixed rates.
4. Abolition of Private Mortgage Insurance
Excluding VA loans, if you're financing more than 80% of the value of your home, you, the borrower, typically pay for Personal Mortgage Insurance (PMI). In situations like these, refinancing a mortgage can be an opportunity to reduce these costs.
5. Receive Funds for Home Renovations and Repairs
Home equity is built through mortgage payments, home valuations, or a combination. As a borrower, you can refinance your payments and access the equity you have built. This money can be used for various purposes. For example, renovating or repairing a home and paying large expenses such as medical bills, college tuition, etc.
Refinance Your Home Loan Today
Refinancing may have one or more advantages for you, depending on the type of loan you are qualified for. This includes a lower annual percentage rate (APR), lower monthly payment, shorter repayment period, removal of private mortgage insurance (PMI), and the capacity to withdraw equity for other purposes.
Seek to increase your savings and build an emergency fund to avoid relying on home equity in tough financial times. Great Southern Bank is among the top mortgage lenders for refinancing because of its flexible loan payback options, quick approval procedure, and lower credit score requirements.
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