Advantages of Refinancing a Mortgage in Tampa Bay

Refinancing a mortgage basically means taking out a new home loan to replace your current one. Depending on your circumstances, this could provide several benefits. Here are some of the advantages of refinancing a mortgage:

Better Mortgage Rates

One of the greatest reasons to refinance is to take advantage of lower mortgage rates. This might be because of changes in the market or improvements to your credit score that make you eligible for better interest rates.

Additionally, with a mortgage refinance, you can also switch your adjustable-rate mortgage to a fixed-rate mortgage.

Lower Monthly Payments

Most of the time, lower interest rates mean lower monthly payments as well, allowing you to have more funds to pay off high-interest debts or to add to your retirement savings.

Shorten Your Term

Most first-time homebuyers start off with a 30-year mortgage and then refinance to a 15-year mortgage. A shorter term means that you'll be able to pay off your mortgage faster. This, in turn, reduces the interest that you'll pay and saves you more money over the life of the loan.

Cash Out Your Equity

A mortgage refinance can allow you to cash out your home equity and use it for purposes such as renovations, your kid's college education, or to pay off debt.

Cancel Mortgage Insurance Premium

Mortgage insurance premiums can be an unwanted additional cost. This is especially true if you have an FHA home loan where the mortgage insurance stays for the life of the loan.

By refinancing your mortgage, you can get rid of your mortgage insurance premium once you've reached 20% equity on your home.

Remove an Individual from the Mortgage

Sometimes a person who originally signed on to the home loan is no longer necessary or held responsible for the mortgage. Examples of this would be ex-spouses or a co-signer. And the only way to remove them from the home loan is by refinancing.