During tough times, it’s natural for many of us to need a little extra financial breathing room for any number of reasons. Some might be able to take on a second job, and others might look to a short-term loan like a title or personal loan to get them over a brief hump.
For people with a long term mortgage, a home refinance can be another great outlet. We offer comprehensive refinancing programs at American Loans, including no closing costs programs. What are some of the ways refinancing a home mortgage can help your financial burden, both in the short term and long term?
The most straightforward way to see increased financial flexibility through refinancing is via lower mortgage payments, which are the simplest outcome of this process. Any time mortgage rates sit at least two percentage points lower than where they were when you originally signed your own mortgage, you could be a great candidate to refinance and significantly lower monthly payments.
Even very limited rate changes can have a huge effect on your wallet over the course of your loan.
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If you’ve been on an adjustable-rate mortgage but are growing weary of the potentially huge swings in interest rates, know that you’re not alone – and refinancing can be the perfect way to switch to a more stable, fixed-rate loan with a good rate locked in.
Refinancing a mortgage is a great way to raise credit. The obvious way this happens is through lower monthly payments, which makes payment deadlines easier to meet and subsequently raises credit.
For people whose credit scores are being dragged down by debt outside the mortgage, however, using the extra money available from refinancing is another great outlet to reduce the strain and potentially raise the credit score.
Down similar lines, it’s possible for you to leverage any equity you’ve built up in your home for a number of different financial goals. You can choose to shorten the term of your loan if the numbers work well enough, or you can just pay more each month and finish it earlier. Many people also use their equity for a cash-out refinance where they receive actual cash as part of the transaction – this is perfect for paying down a large debt, as we noted above, or for sending a child to college or going on a much-needed vacation.
At American Loans, we’re here to help you with your home refinancing project – even if you have bad credit, which we want to help you raise. Our professional brokers are standing by to assist you.