Recently, low rates have prompted many homeowners to consider refinancing their existing mortgages. If the interest rate you are paying on your existing mortgage is higher than current interest rates, you may reduce your monthly payments* by using the existing equity in your home to refinance. You may benefit from refinancing if:
- You plan on living in your home for a number of years
- You’ve built up considerable equity in your home
Lower your monthly payments
If interest rates are significantly or even slightly lower than when you bought your house, or if you want to convert from an adjustable to a fixed rate loan to gain greater stability, refinancing through a home equity loan may lower your monthly payment.
Reduce your interest rate
Credit cards, auto loans, and second mortgages often carry an interest rate far higher than that of a home equity loan or a Prime Equily Line� of Credit. Refinancing may decrease your monthly interest charges.
Convert equity/cash out
If you’ve built up considerable equity in your home, you may be eligible to refinance to a larger loan amount. This would provide you additional cash that could be used for debt consolidation, home improvement, or for personal use.* The interest paid on your “cash out” refinance, unlike personal loans, could be tax deductible (consult your tax advisor concerning interest deductibility).
For other financial planning advice, consult with your United Mortgage loan counselor.