When you enter into a mortgage to purchase your home, you enter into a contract that can last for decades. This does not necessarily mean that you have to stick with the same home loan until your home is paid off, however; if you are unhappy with certain aspects of your mortgage, refinancing your loan may be an option. If you are considering or are in the process of refinancing your mortgage in New York, Melvin Monachan is here to help.
Common Reasons to Refinance Your Mortgage
Interest Rates Have Decreased
If you obtained a mortgage to purchase your home several decades ago, you may be faced with an extremely high interest rate--in the 1990s, double-digit interest rates were not uncommon. Since that time, however, interest rates have decreased substantially. Depending on your credit score and the interest rate on your current mortgage, refinancing your mortgage could cut your interest payment in half, saving you thousands of dollars a year and even tens of thousands of dollars over the life of your loan.
Your Credit Score has Improved
While it's always a good idea to work to improve your credit before purchasing a home, this isn't always an option. If your credit was less than ideal when you obtained your first mortgage, you may be stuck with an interest rate that you are unhappy with. If your credit score has improved since you applied for your first mortgage, you may be able to refinance your loan to decrease the interest that you will pay.
Changing the Length of Your Loan
The average loan term in the United States is thirty years. Although a loan of this lifespan results in a lower monthly payment, three decades is a long time to be obligated on a loan. If you are able to afford higher monthly payments, refinancing your loan to obtain a shorter-term mortgage can help you pay off your home more quickly.
On the opposite end of the spectrum, you may encounter a situation in your life which make affording your current mortgage difficult or impossible. If you are struggling to make your monthly mortgage payments, refinancing your loan to a longer loan term may be an option which can alleviate the financial stress which you face.
Getting Cash from Your Investment
With each monthly mortgage payment on a conventional loan, you obtain more and more equity in your home, meaning that you "own" a little bit more of your home each time you make your payment. If you have built up a significant amount of equity in your home, you may be able to exchange that equity for cash by refinancing your mortgage. This can be a convenient way to pay off debt or make upgrades or repairs to your home.
Refinancing Your Mortgage? We're Here to Help
No matter the reason you choose to refinance, Monachan Law is here to assist you with your closing. Our office has performed countless of closings for New Yorkers all over the state and is proud to provide competent representation for throughout the entirety of the closing process. For more information on the closing process, or to schedule your closing, call (347) 620-0565 today.