Your Lake of the Ozarks Mortgage Lender: 6 Reasons You May Want to Refinance

Wednesday, February 18, 2015

6 Reasons You May Want to Refinance

Have you ever thought about refinancing your home at the Lake of the Ozarks? If done correctly, refinancing can save you a lot of money. So how do you know if refinancing is the right option for you? Your Lake of the Ozarks mortgage lender is here to help! Here are 6 reasons you may want to refinance from Credit.com:

1. Lower Your Interest Rate

Generally, if you can lower your interest rate by at least 2%, you should consider refinancing. Since interest rates are currently at a historic low, chances are you can get a much better rate by refinancing now. You could end up saving a lot of money in interest paid over the period of your loan.

2. Switch Loan Type

With many different types of Lake of the Ozarks home loans available, some loan types are better for some people than others. If you currently have an adjustable rate mortgage (ARM), you may want to switch to a fixed rate mortgage (FRM). This allows you to lock in a low rate for a long time. On the other hand, you may be able to reduce your current payments by switching from a FRM to an ARM.

3. Avoid Balloon Payment

Some mortgages have a large payment due at the end of the loan term, usually 5-7 years, called a "balloon payment." Essentially, this type of mortgage is a short-term loan that is setup like a long-term loan for the first few years. You may need to refinance your loan in order to avoid paying this large expense.

4. Stop Paying Private Mortgage Insurance

When more than 80% of the home's sale price is borrowed, sometimes the borrower is required to purchase private mortgage insurance (PMI). If the home's value has increased, you can use this amount to refinance and stop paying that PMI.

5. Cash Out Home Equity

Home equity is often used as a way to finance a remodeling project, college tuition, car purchase or a vacation. If your home's value has increased, you can refinance to cash out that extra amount. You would actually be refinancing your mortgage for more than you currently owe on it and then pocketing the difference.

6. Consolidate Debts

If you have a lot of high interest debts, you may be able to save money by consolidating those debts into a mortgage. Auto loans, credit cards, second mortgages and other debts can all be included in your refinance.

If you have more questions about whether or not refinancing your Lake of the Ozarks mortgage is a good option for you, contact me at 573-746-7211. When it comes to your financing needs, I'm committed to working with you every step of the way. I'll discuss financing options, offer competitive interest rates and back it up with the first class service you deserve!

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