If you’re a homeowner, now may be the perfect time to consider refinancing your mortgage. With interest rates at historic lows, refinancing could potentially lower your monthly payments, shorten the length of your loan, or even help you build equity in your home more quickly. In this article, we’ll take a look at some of the reasons why now is the time to consider refinancing your mortgage.
Low Interest Rates
One of the biggest reasons to consider refinancing your mortgage right now is because interest rates are at historic lows. As of January 2021, the average 30-year fixed-rate mortgage is around 2.75%, which is significantly lower than the historical average of around 4%. This means that if you refinance mortgage today, you may be able to lower your monthly payments and save thousands of dollars over the life of your loan.
Shorten the Length of Your Loan
Another benefit of refinancing your mortgage is that it can help you shorten the length of your loan. If you currently have a 30-year mortgage and refinance to a 15-year mortgage, you’ll end up paying less interest over the life of the loan and will build equity in your home more quickly.
Build Equity Faster
Building equity in your home is important because it gives you a financial cushion in case of emergencies and can also help you prepare for retirement. By refinancing your mortgage, you could potentially shorten the length of your loan and build equity faster.
If you have high-interest credit card debt or other loans, refinancing your mortgage could be a great way to consolidate that debt and lower your overall monthly payments.
Improve Your Credit Score
Refinancing your mortgage could also help improve your credit score. When you refinance, the lender will pull your credit score, which can help to update your credit report and potentially improve your score.
Lower Monthly Payments
Lowering your monthly payments is one of the most obvious benefits of refinancing your mortgage. By refinancing at a lower interest rate, you could potentially lower your monthly payments and free up more money each month to use for other expenses or to save for the future.
Refinancing your mortgage can be a great way to take advantage of low interest rates, shorten the length of your loan, build equity in your home more quickly, consolidate debt, improve your credit score, and lower your monthly payments. If you’re a homeowner, now is the time to consider refinancing your mortgage. Make sure to do your research and talk to a mortgage lender to see if refinancing is the right choice for you. With interest rates at historic lows, it’s definitely worth looking into.