Refinancing

 

What are the benefits of refinancing?

Lower your monthly payments.

Some people say that refinancing only makes sense if you can lower you interest rate by 2%. I do not agree with that school of thought. There are so many different reasons why people refinance, so looking at a drop in rates is only part of the idea. Some people look to extend their mortgage to back to a 30 year, while others want to cut the years in half. Sometimes even a small difference in rates can make it beneficial to refinance. If you plan on being in the home for a long time, then you do not need to save as much per month. If you can save $40 per month, you will save $14,400 over a 30-year period.
 
Change your loan to a shorter term.
 
By changing a 30-year mortgage to a 15-year mortgage, you can save a bundle of money. Depending on how much you owe and what the current interest rate is, your monthly payment may not even go up. When you

  shorten the term of your mortgage, you are able to build equity a lot faster. If you can afford it, this is the way to go. There are other options besides 15 and 30-year mortgages. You can do 10,15,20,25, or 30-year mortgages.
 
You might be able to get rid of your mortgage insurance.
 
After you have accumulated more than 20-22% equity, you no longer are required to keep mortgage insurance. There are certain stipulations to this, so check with your specific mortgage company. If the difference between the amount you are mortgaging and the value of the property is more than 20%, then through the refinance you may eliminate mortgage insurance all together. Even if you have less than the 20% equity, there are ways to eliminate mortgage insurance. Call me to find out how at 717-587-7552 or email me at steve@ineedamortgage.info
 
Switch from a fixed rate to an adjustable rate.

Adjustable Rate Mortgages (ARMS) can give you a lot of flexibility. ARMS are typically popular when fixed interest rates are going up, but that is not always the case. Typically, the interest rate for the ARM is lower than the fixed, so it allows you to lower your monthly payment. If you plan to move within the next couple of years, it may make sense to have an ARM since the rate is lower. ARMS also come with rate caps, which stops your rate from going above a certain ceiling. An ARM can work out to be a better savings over the long term is interest rates remain steady or decrease.

Switch from an adjustable rate to a fixed rate.

ARM’s are not for everyone. There is the chance that the interest rate may go up. A fixed-rate mortgage can provide you with a sense of security, since the payment will not change. When interest rates are low, you can lock into a low monthly payment for many years to come. There is a sense of constancy with fixed versus adjustable rate mortgages.
 
Consolidate some of your bills.

It has became very popular recently for people to take equity out of their home to pay off some bills with higher interest rates. By consolidating bills, you can greatly decrease your monthly bills and reap tax benefits while you are at it.		  

Classic Mortgage Services is located at 2929 Willow Street Pike in Willow Street, PA 17584

You can reach them by phone at (717) 464-6950, fax at (717) 464-6922, or by clicking here.

Classic Mortgage is a equal housing lender and is licensed by the PA Dept. of Banking.

Classic Mortgage is an equal opportunity employer.