Why Do People Refinance Their Homes

When you refinance a mortgage, this means that your existing loan is paid off and replaced with a new one. There is a myriad of reasons as to why you may want to consider refinancing your mortgage, the primary of which is because interest rates have lowered and you want to obtain a loan that reflects this reduction in interest rates. Before you decide to refinance, it’s important that you have a sound reason as to why you should, as it’s a major decision for any homeowner to make. (Read more about buying a dream home vs a starter home.)

When You Wish to Lower Your Monthly Payment

If you looking for a lower monthly payment on your current mortgage, refinancing it with a mortgage that has a term that’s longer than the one on your current mortgage will allow you to reduce your monthly payments, even if the interest rates aren’t exactly lower than the ones available with your initial mortgage. You will end up paying more in interest rates over time due to the extension of your new mortgage, but you will be able to lower how much you pay each month in the meantime.

You Have Obtained an Improved Credit Score

If you didn’t have a great credit score when you first obtained your mortgage, it’s possible that you have high-interest rates. These interest rates could be lowered for a new mortgage in the event that your credit score improves substantially. If you want the best available rates, make sure that your credit score is around 760 or higher. With this score, you could save well over $100 on your monthly mortgage payments.

Mortgage Rates Las Vegas Have Gone Down

The top reason to refinance is because national interest rates have lowered. If the interest rates have dropped anywhere from 0.5-2.0 percent, you may want to consider refinancing due to the savings you would obtain on your new mortgage. If you’re purchasing a home for the first time, consider working with mortgage brokers in Las Vegas to find the lowest interest rates.