The Top 5 Benefits of Refinancing Your Home

Category: Mortgages Refinance
Posted: 1/10/2017 | Read Time: 3min
Last Updated: 9/10/2021

Refinancing is when homeowners trade their existing mortgage loan for a new mortgage loan, often with a lower rate or shorter loan term. A refinance taps into the home’s current equity for usable cash or could help you build even more equity in the long run.

While a home loan refinance may not make sense for everyone in many instances it can give you new opportunities you could be thankful for.

Here are five primary ways a home loan refinance could benefit you.

Five Home Loan Refinancing Benefits You Need to Know About

1. Potentially Lower Monthly Payments

One of the main attractions for refinancing a mortgage is to try and net a lower monthly payment. Even a difference of a half or a single percentage point could make refinancing your home loan a worthy endeavor.

Before refinancing, it may be a good idea to check the most current mortgage rates to make see if they’re lower than your current rate. If you plan to move in the foreseeable future, be sure you will be able to recoup any refinancing costs paid at closing, which typically runs between two to five percent of the loan amount, depending on the lender. For example, if closing costs are around $3,000 and you save $300 through refinancing, your breakeven would be 10 months in that home.

2. Build Equity

Reducing your term allows you to build up equity in your property in less time. Plus, it could be a great idea for some homeowners who can afford to take on larger payments for bigger savings over the life of their loan.

Related: Refinance Tips: How Much Cash Can You Take Out for Home Renovations?

3. Stabilize Your Loan Payments

If you currently have an adjustable-rate mortgage and wish for more predictable monthly loan payments, refinancing to a fixed-rate mortgage could give you the security you need to better budget for future plans.

4. Take Advantage of Your Credit Score

If your credit score has increased since you opened your mortgage loan, you could be in a better position to refinance your mortgage down to a lower interest rate. The option to choose a cash-out refinance could potentially help your credit score too since you could use the extra money to consolidate debt or build up your savings.

5. Pay Off Your Mortgage Sooner

There’s no better feeling than owning your home and having no more mortgage payments. Since your mortgage payment likely is your largest monthly bill, freeing up that cash every month could help with other everyday expenses, or you can build up your savings.

Refinancing to a mortgage with lower terms positions you to pay off your mortgage in less time. Again, you may have higher monthly payments if you go from a 30-year mortgage to a 15-year mortgage, but that also means you save money in interest in the long run.

CRUNCH THE NUMBERS ON REFINANCING

Modern and No Hidden Lender Fees.*

*While Wyndham does not charge junk fees, application fees, processing fees, or underwriting fees, these fees may be charged by a Third Party service provider in connection with your loan. Terms and conditions apply. Rates are subject to change.

 

The Bottom Line

Homeownership is still considered a wise investment by most Americans*, and regardless of how long you’ve owned your home, there is always a chance to make your investment do even more for you with a home loan refinance.

Contact WCM today to determine if now is the right time for you to refinance and to learn about our advanced digital processes designed to save you time, money and effort.

 

*Wyndham Capital Mortgage commissioned Atomik Research to run an online survey of 2,342 adults in the United States for their Mortgage 101 survey. The margin of error fell within +/- 2 percentage points with a confidence interval of 95 percent. The fieldwork took place between March 23rd and March 29th, 2021. Atomik Research is an independent creative market research agency.

 


Maggie joined the Wyndham Capital Mortgage team in November 2020 as a Content Strategist. She has more than six years of content creation experience, which includes launching WBTV’s digital brand Queen City Weekend (now QC Life) and garnering more than 1.1 million page views across her articles. With a love of storytelling, she hopes to bring that passion to WCM and the many families it serves. She resides in Charlotte, North Carolina, and can often be found at a coffee shop, latte in hand.

Related Posts