If you have a mortgage, you have probably heard other homeowners talk about having their mortgages refinanced, and this may have peaked your interest. If you aren’t aware of how this works, you should definitely discuss this with your bank, as there are definite perks. Refinancing can mean that you pay off your property faster, which can save you thousands of dollars in interest.
Why should you consider refinancing?
If you have a 30 year mortgage, for example, this is an excellent time to consider refinancing as interest rates are so low. By refinancing, you could reduce the length of your mortgage to fifteen years, and still have monthly payments that are similar. There are methods whereby you can calculate the difference in your mortgage if you refinanced at a different interest rate, so look for a calculator on a website. Many banks also provide a quick and easy way to calculate a difference in repayments on their sites. If you’re not sure how to work this out and are interested in a refinance of your mortgage loans in Knoxville, you should visit a nearby bank to have the details explained to you.
When you refinance, you lower your interest rate if, of course, it is currently financed at a higher interest rate. By refinancing, even if you don’t change the length of your mortgage agreement, you could free up hundreds of dollars by taking advantage of lower interest rates. These savings could be reinvested or saved and could make an enormous difference to your financial situation.
Should you move from an adjustable mortgage to a fixed-rate loan?
Adjustable-rate mortgages mean that interest rates on your mortgage fluctuate according to those in the market-place. However, if you agree to a fixed-rate loan, you will continue to pay the rate of interest you’ve agreed to, even when rates increase. Given that interest rates are very low at the moment, this would be an excellent time to take advantage of this, and to tie in a mortgage at this level. In the coming years, it is highly likely that interest rates will increase, and you will be protected from these hikes.
Are you eligible for refinancing?
Your eligibility would depend on the length of your current mortgage, and the interest rate you’re being charged. Some banks also look at the amount you’ve paid off, and whether you have already refinanced. Either way, if you think this could be something that would save you money, consider making an appointment with a mortgage provider to see whether this could be beneficial to you.
