As mortgage rates continue to fall, many homeowners in Indiana are choosing to refinance their home loans in order to save money, build equity, and pay their mortgages off faster. When you refinance your home loan, you are essentially replacing your current mortgage with a new one. There are many reasons why homeowners choose to do this, and our team at GVC Mortgage has put together a list of reasons why you might want to consider refinancing this year.
1. Lower Interest Rates
You may have secured your loan when rates were higher, and now that they’ve dipped, you want to take advantage by refinancing in order to pay less interest over the life of the loan. If you can lower your interest rate by one-half to three-quarters of a percentage point, you can substantially lower your monthly payment.
2. Shorten Your Term
Many borrowers start out with a 30-year home loan, then refinance to a 15-year fixed-rate mortgage after a few years. This allows them to pay the mortgage off faster and save a lot of money in interest over the life of the loan. Mortgage rates on 15-year loans are also significantly lower than on 30-year mortgages, so you may even be able to shorten your term without a big increase in your monthly mortgage payment.
3. Consolidate Debt
Some people choose to roll all their debts into one loan in order to simplify their loan payoff and get a better interest rate, or for a number of other reasons. Mortgage rates are usually lower than the interest rates paid on credit cards and other unsecured debt, so you save on interest payments. Additionally, mortgages can be repaid over longer terms than other types of debt and the interest payments are tax-deductible, while other debts are not.
To discuss refinancing with a home loan professional, make an appointment with a representative from GVC Mortgage. At GVC, we love to sit down with homeowners or buyers and talk about home loan options. To set up an appointment or to get more information, contact us at (317) 564-4906 or apply online today.