There are many reasons why you might want to refinance your mortgage, including the opportunity to obtain a lower interest rate and lowering your monthly payments. Here are three reasons to consider when thinking about refinancing.
Interest Rates Have Dropped
The main reason homeowners want to refinance their mortgage is to lower the interest rates. It’s why we refinance just about any loan, whether it’s a mortgage, student loan, or even credit card debt.
Your Credit Score Has Gone Up
If you have a good credit score, you might be able to qualify for a lower interest rate. According to myFICO, current mortgage rates can vary by as much as 1.50% based on your credit score. To qualify for the best mortgage rates, aim for a FICO score of 760 or higher.
Lower Your Monthly Payment
For some, refinancing your mortgage is a great way to lower your monthly payments. However, the term will be longer than what’s left on the mortgage. You’ll be adding another 10 yeas of payments at the same interest rates. On the negative side, you’re probably going to have higher interest rates, but if you need lower monthly payments this is a good reason to consider refinancing.