Refinancing your mortgage is a great way to benefit from the equity you’ve built and lower your monthly payment.
But there are also some drawbacks.
At Better Together Properties, we’ve worked in real estate in Pensacola for quite some time. And we’ve learned a thing or two about buying, selling, and yes… even refinancing homes.
So SHOULD YOU refinance your mortgage?
Here are some considerations…
Lower Payments — Perhaps the biggest benefit to refinancing a property (and why most homeowners do so) is because it saves them money on their monthly payments. But that’s only the case if there’s quite a bit of equity in the property.
Extra Interest — Keep in mind that by refinancing the mortgage, you might be adding on some extra years to your loan and thereby adding some extra interest that you’ll have to pay over the life of the loan.
Loan Term — When refinancing, the borrower chooses either a 15-year or a 30-year term. That decision will have a huge impact on the monthly payment.
Change Loan Type — You can also change the type of loan you’ve got (since you’re essentially getting a new loan). This can be beneficial if you’re opting for a loan with a lower interest rate.
Ultimately, the choice is yours. If you’re planning to live in the property for quite a while longer and you want to lower your monthly payment, it might not be such a bad idea.