Refinancing your mortgage allows you to replace your current mortgage with a new mortgage to better fit your situation. There are many reasons people refinance, here are a few of the most common ones:
1. To obtain a better interest rate and term. This could enable you to pay less interest, not only because of a decrease in the interest rate, but also because you may be able to reduce the term of the loan.
2. To have more stability in your interest rate. In a fluctuating rate environment, refinancing from a variable rate loan to a fixed rate loan eliminates the risk of not knowing how rates will impact you down the road.
3. To consolidate debt. Consolidating your loans into one and using your home as collateral can help you get a more favorable interest rate and loan term and could even lower your overall payment.
When you do refinance, there could be costs associated with the new loan and it is important to consider those costs in comparison to the benefits of refinancing. I would recommend that you discuss with your accountant or tax consultant about the benefits of refinancing with your taxes as well. When you use your home as collateral on a loan, you typically have the ability to deduct the interest paid on your tax return.
If refinancing seems like a beneficial option for you, our experts are ready to help you and to exceed your expectations. To get started, visit your local Wasatch Peaks branch or call 801-627-8700.
C. Blake Burrell