It’s hard to find good news these days with all of the stress associated with COVID-19. However, one silver lining for homeowners is that interest rates are low. That means refinancing may save you thousands of dollars over the life of your mortgage. Here’s what you need to know.
If you’re not sure whether refinancing is for you, here are three ways it could improve your financial situation.
You might end up with a lower payment. The growing uncertainty surrounding the spread of the novel coronavirus that causes COVID-19 means we may be experiencing some financial challenges in the months ahead. With a lower mortgage payment, you’ll free up more money for other needs.
You may be able to lock in a fixed rate. If you have an adjustable mortgage rate, there is always the risk that your rate will rise over time, leading to higher monthly payments. Right now, with so much uncertainty in the world, an increase to your mortgage payment is the last thing you would want. By refinancing, you may be able to lock in a fixed rate, which will give you the peace of mind knowing your interest rate – and payment -- won’t fluctuate.
You may be able to stop paying PMI. If you bought your house and put down less than 20 percent of what the home is worth, you’re likely paying private mortgage insurance, or PMI, which protects the lender if you don’t make good on the loan. Some mortgage loans let you stop paying PMI after your house has a certain amount of equity in it, while other loans require you to pay PMI for the duration of the loan. Refinancing to a loan that doesn’t require you to pay PMI could save you money each month in the long run.
If you’re anxious about your finances right now, you’re not alone, and HomeFree-USA is here to guide you through the coming months. Refinancing is just one of the ways that you might be able to add some stability to your life. If you’re anxious about your finances right now, you’re not alone. There are a variety of mortgage options available. Speak to a certified HomeFree-USA Advisor to determine the mortgage option that is right for you.