What to Know About Changing a Mortgage’s Term
It may be possible to refinance your current mortgage to one that will be paid off on either before or after its current due date. While there may be many good reasons to change your mortgage’s due date, there can also be many downfalls to doing so as well.
The Pros and Cons of Extending Your Mortgage
Perhaps the best reason to extend the term of a mortgage is that it will likely reduce your monthly payment. It may also allow you to reduce your interest rate or cash out equity that is currently in the home. A downside to extending a mortgage is that you could pay more interest to the lender. At the same time, a lower percentage of each payment is going to the principal balance.
The Pros and Cons of Shortening a Mortgage Term
The pros of condensing your mortgage into fewer payments include less interest being paid to the lender and accruing equity in the property faster. The potential downsides to shortening your mortgage include higher mortgage payments in addition to fees paid to refinance the mortgage. For some, it may not be realistic to pay thousands in closing costs and then have to deal with paying a higher mortgage payment on top of that.
Do Your Research Ahead of Time
A loan officer in Las Vegas may be able to talk more about whether it is a good idea to change the term on your mortgage. It may also be possible to use online calculators or other resources to evaluate each option on your own. Ideally, you will make a decision based on your ability to make payments now while also working to pay off the loan in as few payments as possible.