New Jersey Mortgage Refinancing: Reasons to Consider Refinancing a Home Mortgage
Refinancing a home mortgage in NJ
The advantages of refinancing a home mortgage range from paying off bills to covering school loans and home improvements. You can even use the equity in your home to invest in a second property. For many, mortgage refinancing means paying off debt and realizing financial freedom.
The main reason most people refinance is to get better terms on their mortgage. If you have an adjustable rate mortgage (ARM) and the adjustment period is coming up, by refinancing to a fixed rate mortgage you can save yourself from having to pay a higher mortgage rate.
With interest rates at historic lows and the fact that we have the most diversified programs in the industry, our award-winning mortgage company in NJ will tailor the right mortgage refinancing program for your specific needs. Mortgage refinancing experts will help you determine whether it makes sense to pay points or lock-in an interest rate— and how to keep closing costs to a minimum. As a direct lender with decades of experience, we can get even the tough deals done.
5 main reasons to consider mortgage refinancing
- Decrease monthly payments from a higher fixed rate to a lower fixed rate
Simply reducing your monthly payment cost can be a big cost saver. Example: If the rate is 7.5% now and you switch to a 6.5% rate, you’ll save 1% on the mortgage less the costs of refinancing. On a $200,000 mortgage, the savings will be over $50,000 over 30 years by reducing the interest rate by just that one percentage point.
- Improve monthly cash flow with lower payments
Cashflow can be tight after moving into a new home. Switching from an adjustable mortgage rate program to one where the rate is fixed for the next three to ten years could provide breathing room. Similarly, for those who are in a 15- or 20-year term loan, switching to a 30-year term can also increase monthly cashflow.
- Switch to a fixed rate program to eliminate the payment changes of adjustable rate mortgages (ARMs)
Home owners with one-year ARMs will see their rates rise when mortgage rates move up. By using programs that hold rates steady for three, five or seven years, you can get a low fixed mortgage rate instead.
- Withdraw funds from the equity in a home
If cash is needed for home improvements, college education, or to consolidate debts, you may be able to refinance 75% to 80% of the current value of the home providing it has been owned for one year or more.
- Shorter loan terms
Probably the best incentive for refinancing a home mortgage is that you can get a shorter term loan while keeping the loan payment stable. You could potentially save tens of thousands of dollars in interest by reducing the term of the loan.
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