How could I lower my mortgage payment by refinancing?
Can I lower my mortgage payment by refinancing?
Homeowners often seek ways to cut their monthly mortgage payments. Fortunately, refinancing your current mortgage is a proven method. This involves replacing the existing loan with a new one, usually at a lower interest rate that reduces the monthly payment.
As your property value and credit score change, you may qualify for better rates than when you first obtained your mortgage. Refinancing lets you benefit from these lower rates, decreasing your total home payment and monthly mortgage bills. It also permits changes to your loan term.
Do you already know that a mortgage refinance is the right move for you? If you’re ready to lower your mortgage payment, you can start by applying for a refinance with Owning right now.
Is it possible to lower my mortgage payment by refinancing?
If you’re a homeowner, it’s likely that your mortgage payment is your most significant monthly expense. With some folks stuck with higher costs, it’s fair to question if there’s a way to lower this financial commitment. One option is through refinancing your mortgage.
Refinancing a mortgage is essentially replacing your existing home loan with a new one. This new loan ideally has better terms and a lower interest rate, depending on your financial situation and market conditions.
Since the interest rate is directly proportional to your monthly mortgage payment, a lower rate implies lower payments. However, it’s essential to consider the cost of refinancing. It can be a bit expensive with closing costs, application fees, and potentially appraisal fees.
Therefore, before making a decision, you should work out whether the potential savings in the monthly payment outweigh these upfront costs. Also, you may choose ‘cash-out refinancing,’* which may result in lower monthly payments. This is a method where you borrow more than you owe on your current loan and receive the difference in cash.
While it is indeed possible to lower your mortgage payment by refinancing, it is also vital to weigh all pros and cons, consider your financial situation, and maybe even consult a financial advisor. It’s a significant financial decision, so doing your research is instrumental.
are there costs to refinance my mortgage?
Refinancing your mortgage could make your monthly payments lower, but you have to remember, there are costs associated with refinancing.
There’s usually an application fee, some loan origination fees, and an appraisal fee you’ll need to deal with.
Also, don’t forget the possibility of costs for title insurance and searching for a title. When you add it all up, these costs can be anything from 3%-to-6% of your loan amount. So, you really have to sit down and weigh these costs against any savings you might make to figure out if refinancing is the right step for your finances.
What’s a breakeven point for a mortgage refinance?
The breakeven point for a mortgage refinance is the point at which the cost of refinancing equals the savings derived from it. It’s a crucial factor to consider before deciding to refinance your mortgage.
How can I calculate my breakeven point?
Calculating the breakeven point of your mortgage refinance is simple. It’s done by dividing the total cost of refinancing by the monthly savings from the new loan.
For example, if your refinancing costs are $2,000 and you save $100 per month with the new loan, your breakeven point is 20 months. This means you would need to keep the new loan for at least 20 months to make the refinancing worthwhile.
Can I see how much I can save by refinancing my mortgage?
Are you ready to find out how much you could potentially save with a mortgage refinance? Owning has developed a refinance calculator that compares how much you might be able to save if you choose to refinance your mortgage.
Check out our refinance calculator, figure out how much you could lower your monthly mortgage costs by, and then apply for a mortgage refinance with Owning. The lower mortgage payment you’ve been wanting is only a few clicks away!
* Using funds from a Cash-out Refinance to consolidate debt may result in the debt taking longer to pay off as it will be combined with borrower’s mortgage principle amount and will be paid off over the full loan term. Contact Owning for more information.
Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Contact Owning, Inc. for current rates. Restrictions apply.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Owning for current rates and for more information.
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Owning, Inc. does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Owning, Inc. Owning, Inc. its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. Owning does not provide tax advice. Please contact your tax adviser for any tax related questions.
