When you refinance, you are, obviously, taking advantage of a lower interest rate to save money.
There is, however, more than one way to save money. You can keep the length of the mortgage the same as it currently is and lower your monthly payment amount, or you can keep your payment the same, and shorten the length of your loan.
If your financial situation has improved since the original purchase of your home, you may even consider increasing your monthly payment in order to dramatically shorten the term of your loan, saving money in the long run on interest payments.
Whether you choose refinance to lower your monthly payments or refinance to shorten the term of the loan has many determining factors. If you can handle the amount of the monthly payment, shortening the term saves money paid on interest and may allow you to pay off your mortgage in full by a point when the extra money would be valuable, such as retirement, or children going to college.
If your current monthly payments are causing problems, such as limiting the amount you can save toward retirement, or preventing you from replacing a car that is in need of work, you may choose to lower your monthly payments, freeing up some cash for things that you need right now.
Whatever the case may be, use a free online mortgage calculator to work out your finances. Call your local mortgage specialist for a free reevaluation of your current mortgage loan. Mortgage calculators are easy to create and you can readily find some simple videos which can teach you how to create one via Excel.
There is, however, more than one way to save money. You can keep the length of the mortgage the same as it currently is and lower your monthly payment amount, or you can keep your payment the same, and shorten the length of your loan.
If your financial situation has improved since the original purchase of your home, you may even consider increasing your monthly payment in order to dramatically shorten the term of your loan, saving money in the long run on interest payments.
Whether you choose refinance to lower your monthly payments or refinance to shorten the term of the loan has many determining factors. If you can handle the amount of the monthly payment, shortening the term saves money paid on interest and may allow you to pay off your mortgage in full by a point when the extra money would be valuable, such as retirement, or children going to college.
If your current monthly payments are causing problems, such as limiting the amount you can save toward retirement, or preventing you from replacing a car that is in need of work, you may choose to lower your monthly payments, freeing up some cash for things that you need right now.
Whatever the case may be, use a free online mortgage calculator to work out your finances. Call your local mortgage specialist for a free reevaluation of your current mortgage loan. Mortgage calculators are easy to create and you can readily find some simple videos which can teach you how to create one via Excel.
