Why Work with a Mortgage Broker for Refinancing
Experienced mortgage brokers help you save time and money when finding mortgage programs. When you’re looking for refinance options, specifically, they can help you secure suitable loan options based on your credit history. They give you access to the most competitive rates and payment terms on the market, too.
Refinancing: The Benefits
During your mortgage term, you may want to refinance to meet a variety of goals, such as reducing the interest rate or paying off the loan faster. With a refinance, you will completely replace your current mortgage with a new loan that provides a new term, rate of interest, and monthly payment.
Lower your mortgage rate.
The most common reason refinancing may make sense is for a better interest rate. If mortgage rates are lower than when you closed on your current loan, a refinance could reduce the monthly payments and the total amount of interest paid over the life of the loan.
Move from one type of mortgage from another.
If current mortgage has an adjustable-rate (ARM), and replacing it with a fix rate may be an option. Some mortgages have private mortgage insurance (PMI), and PMI can sometimes only be removable by a refinance when you have enough equity in your home. Reverse mortgages for those old enough to qualify require a refinance if you purchased the home before the age of 62.
Build equity fast; pay off the loan faster.
Going from a 30-year fixed rate to a 15-year fixed may be a good decision if you’d like to pay your home off faster or you can afford a large monthly payment, or if your financial situation has improved and you can afford a larger monthly payment. A shorter loan term will allow you to build equity faster, own your home sooner, and pay less interest.
Get cash out
If you have enough equity in your home, a cash out refinance is an option if you could use money to make home improvements or to improve your financial situation. Cash out is commonly used to pay off higher interest debt since taking out a mortgage offers substantially lower rates than credit cards and personal loans.
Refinancing: Does it Make Sense?
To see if refinancing makes sense, a quick check is to calculate how long it will take to recoup the costs of the refinance by determining your “Breakeven.” Simply take the total cost associated with a refinance and divide it by your monthly savings. Note that the “Breakeven” formula will not work for a cash-out refinance or to reduce the term of your mortgage. We can provide amortization schedules to show interest savings and debt consolidation calculations to help show your saving if you are paying off other debts outside the mortgage.
Other factors to consider when deciding to refinance:
• Are you planning to move in the next few years and sell your home? If so, you want to make sure you “Breakeven.”
• If you have 20 or 25 years left in your mortgage, do you want to extend the loan term, or do you want to keep the years the same or lower?
Why Choose Brandywine Valley Mortgage
Let our experienced mortgage brokers in West Chester, PA help you with mortgage refinancing. Our brokers have over 15 years of industry experience. You can count on us to help you create a sustainable game plan for your refinancing program, regardless of how simple or complex it is.
Find the Right Refinancing Option Today
Mortgage refinancing doesn’t have to be difficult. With the help of our brokers at Brandywine Valley Mortgage, you can easily secure the refinance rates and payment terms that you need.