- Get a lower interest rate and make lower payments.
A lower interest rate usually means you will make lower monthly mortgage payments, possibly because your credit score has improved, changes in market conditions or getting out of a less desirable mortgage loan.
- Change the mortgage term.
If you decrease the length of your mortgage and you go from a 30-year term to a 15-year term, you will have a higher monthly payment but a lower interest rate.
You may want to increase the length of your mortgage to give you a lower monthly payment, ease your monthly burdens and you can always apply additional monies towards your principal.
- Adjustable-Rate Mortgage (ARM) conversion to a Fixed-Rate Mortgage.
Interest rates for an ARM can fluctuate so monthly mortgage payments can also rise or fall. Because the variable ARM rate is unpredictable you may benefit by switching to a Fixed-Rate Mortgage that has a fixed interest rate and monthly payment.
- Cash Out Refinance.
If you do a Cash Out refinance for an amount greater than what you owe on your home and enough equity is available, you may receive an approved lump sum cash payment. You may use this cash for home improvements, credit card payoff or for other major expenses.
- Mortgage interest is usually tax-deductible
Consult a tax professional for more information.
- Homeowners should evaluate their options and keep in mind refinancing usually will benefit if you plan on staying in your home for a minimum of three-five years to recoup your refinancing costs.