Refinancing your mortgage creates a great opportunity to lower your interest rate, but don’t forget these other tips when refinancing.
- Change your mortgage length
If you’ve recently come into a different financial situation, consider switching the length of your mortgage. If you started with a 30-year mortgage and have a stable financial situation, a 15-year mortgage will save you more money in the long run. You won’t be paying as much in interest, and you’ll build equity faster.
- Switch to a Fixed Rate
Adjustable rates are tempting due to their lower introductory rates, but changing to a fixed rate may be better in the long term. Fixed rates offer stability, allowing you to manage your budget more accurately.
- Consider a Cash-Out Refinance
Want a potentially lower interest rates plus extra cash? A cash-out mortgage refinance might be right for you. If you owe $80,000 on your $150,000 home, you can refinance the loan for $100,000 and receive a check for $20,000. Use this money for wise investments like home improvements, education, healthcare or investing. Otherwise, you might end up just taking on more debt.
- Consolidate Two Mortgages
When refinancing mortgages, find out if it’s possible to consolidate any previous mortgages you have. When interest rates are low, it’s often possible to pay less under one mortgage than you were before. One mortgage rate is easier to manage than two, and you’ll be saving yourself money.
Talk to a lender at University of Iowa Community Credit Union (UICCU) or a qualified lender of your choice to review your refinancing options.