Imagine this: the bank wanting to save you money. The reality is they are quick to take it, but very hesitant to work with you in sending it back in your direction. We get it, a bank is a business like any other money-making machine, but if you are tired of their antics and want to get a little greedy for yourself, you deserve it.
It’s time to take advantage by refinancing on your home mortgage.
How does home loan refinancing work?
Like other types of refinancing the home mortgage version works the same way. The homeowner applies for a new mortgage which in turn pays off the original mortgage. It essentially swaps one loan for another, yet rewards you for your troubles by providing a better interest term and rate.
What are the advantages to refinancing a home mortgage?
The primary advantage is in certain situations it can convert a variable loan rate to a fixed loan rate, as well as obtain a lower interest rate. Fixed loans are far more desirable because you know the interest is not going to change whenever the bank feels like making adjustments. Fixed loans are dependable so you know exactly what you’ll be paying and how long it will take to pay off the loan.
Additionally, lower interest rates should equal even more savings over the long term because less of your mortgage will be going each month to interest. If you plan to spend a lot more years at the same residence, this can help pay off the home loan much sooner.
NEXT: Is refinancing right for you?