Refinancing Your Home
Home mortgage refinancing can be a smart strategy to give you more financial freedom. When you’re looking to lower your monthly payment and/or save money with a lower interest rate or get cash from your house, a home refinance can be an attractive option. Now is a great time to consider refinancing your home here in the local Chambersburg area or in the surrounding boroughs of Franklin County, PA.
How Does Home Refinancing Work?
Refinancing a home mortgage involves applying for a new home loan, which you’ll immediately use to pay off and replace the prior mortgage. Your lender will typically require a current home appraisal for your property to learn its present value and limit their risk in granting the refinance. Then, you’ll need to supply the same type of information and documents used to qualify for your initial (old) home loan.
Keep in mind that home refinancing may come with a pre-payment penalty if your current mortgage requires it and there may be a refinance fee attached to the new transaction. Before making your decision to refinance your house, be sure to check with your lender — and do the math to ensure the refinance makes sense for you at this time.
Home Refinancing Benefits
Mortgage refinancing can bring you multiple advantages depending upon your specific circumstances. When current mortgage rates are down, lower than when you initially got your home mortgage, refinancing becomes an attractive option. By refinancing your home loan, you can change the loan terms to be more in your favor. You could take the opportunity to free up some cash (if your home’s current value exceeds your remaining mortgage amount) or save money on monthly payments as well.
When you obtain a cash-out refinance, you are converting some of your home’s equity gain into cash that you can use for current needs or wants. You could even consolidate and pay off high-interest debts with the cash. Refinancing could be much cheaper (and get you access to more cash), than taking out a personal loan or using a credit line.
Refinancing can help you avoid an unfavorable interest rate adjustment if your current mortgage is an ARM (adjustable-rate mortgage). Refinancing to a fixed-rate mortgage, for instance, will add some predictability to your long-term budget. Other welcome changes your refinance can bring include shortening your loan term, to a 15-year mortgage for example. This way, you’ll pay off the house sooner and save on interest paid throughout life of your loan. Or you could opt for a longer loan term to lower monthly payments even further than you could with a lower mortgage interest rate alone.
You might also want to refinance your home in order to consolidate an existing second mortgage or HELOC together with your first mortgage. Then you would have only one loan and make only one monthly payment going forward. If your equity is now above 20 percent, you could also refinance your home to eliminate monthly mortgage insurance. (Refinancing is the only way to remove mortgage insurance if you have an FHA loan.) You might also refinance to remove a co-signer or former spouse from your mortgage.
Learn More About Refinancing Your Home
Is this the right time for you to refinance your home? Here at Homespire Mortgage, we are ready to help you with refinancing your mortgage and explain all your options. We believe in making the application process simple and stress-free for local residents in the Chambersburg area of PA. We serve multiple boroughs of Franklin County, including Greencastle, PA, Fayetteville, PA, Mont Alto, PA, Shippensburg, PA, Mercersburg, PA, and Waynesboro, PA.