Refinance Your Mortgage to Free Up Funds
Homeowners refinance their mortgages and take cash out of their homes’ equity for a number of reasons, including debt consolidation and home renovations. But does it ever make sense to refinance your mortgage if you don’t need access to a large sum of cash? The answer is a resounding yes—no cash-out refinances are an excellent option for many homeowners.
Is a no cash-out refinance right for you?
It depends. Start by asking yourself these questions:
- Has my credit score increased since I purchased my home? If you’ve worked hard to rebuild your credit since purchasing your home, you might qualify for a better interest rate today. Lenders use your credit score to assess your credit risk—the lower your score, the higher your risk and, therefore, the higher your interest rate and the higher your monthly payment. The opposite is also true, so if your score has increased, your risk—and your eligible interest rate—have probably decreased.
- Are today’s mortgage interest rates lower than what I’m currently paying? Mortgage rates have fluctuated quite a bit in the last decade. If you originally purchased your home during a time when rates were on the rise, you might luck out with a lower interest rate by refinancing your mortgage today.
- Do I want to lower my monthly mortgage payment? By refinancing and restarting the term of your loan, you can spread out the remaining principal balance over time and reduce the required minimum monthly payment*. Rather than add the surplus to your budget’s discretionary spending bucket, put it to good use by beefing up your emergency fund or paying off debt. (*Beware that this could result in paying more in interest over time; be sure to work with a mortgage professional to weigh the pros and cons of immediate monthly savings versus extending the term of your loan.)
Ready to take the next step?
Apply online today if a no cash-out mortgage refinance sounds right for you, and you could be on your way to a lower monthly mortgage payment before you know it! For more personalized service right off the bat, find a Mortgage Specialist near you. Our experts are available to answer questions and help find the best mortgage product for your needs.