As the year comes to a close, it is only natural to plan for next year and figure out ways to save money and continue moving forward to your financial goals. Saving money is one of the most common resolutions for a new year and you are not alone in your desire to be frugal with your lifestyle. Many people work throughout the year to save money and can look back on their spending to decipher if they were successful; the New Year is a great time to do it. There are many sites that provide information to homeowners who want to save money within their budget from a mortgage refinance to solar panels, and even instant hot water heaters. All of these things can take you from overspending on a necessity to seeing actual savings in your budget on a monthly basis.
When it comes to cutting back in your budget, it can be difficult to make the decisions on what has to go first, especially if you are already cost effective in your expenses. You may have stopped paying for things like the extra cable channels, magazine subscriptions, gym memberships, and even eating out as often so how do you cut back on the necessities of life? You need to have a roof over your head, clean, running water, utilities, and food. There are various methods you can utilize to lower these costs but in the end, one of the largest expenses you probably have is your mortgage. Isnt that a necessity? Yes, a roof over your head is on the list of necessary life items but what if you could lower the rate to a more manageable monthly payment? Wouldnt that help? A mortgage refinance could be just the action you need to take in order to establish an even lower monthly budget, allowing you to pay off more of the principle or even just make those home improvements to increase the home value.
Other Life Situations
A mortgage refinance can be a solid way to get out of a mess. Sometimes life doesnt always move along the way we think it should. In fact, it can get very difficult or even seem unfair. When youre faced with a job loss, illness, or other problem, you can struggle to pay your mortgage and the last thing you need to deal with at this time, is losing your home. Your home is the one thing holding your family together right now and the future is promising but without a mortgage refinance, you cant continue making the payments. Because you have faithfully made payments on the property, many lenders will work with you on a possible refinancing option and it can allow you a grace period or even a lowered monthly payment amount. What if you could breathe easier knowing you could afford the payments with the employment you have right now? As you find more gainful employment, you can expect to get back on track and still enjoy the benefits of a lowered payment.
More than just a Lowered Monthly Payment
Everyone can probably benefit from their monthly expenses being decreased but did you know there are other perks to a mortgage refinance? With a lowered interest rate through the refinancing, you are able to have more equity in your home, at a faster rate.
Refinancing Options for your Home Mortgage
There are several options when it comes to a refinancing for your home.
- Extend the payment period. This is a great option if you are behind on payments or have had a long-term job change where you will be making less money. Life changes can create the need for a better payment option and while you will be paying more on the loan due to the interest for those added months or years, it can be worth the extension.
- Shorten the payment period. By taking your mortgage from 30 years to 15, you will have a higher monthly payment but pay significantly less in interest for that time period. Even if you just shave off 2-3 years, you can save a great deal of money. Anything you can do to shorten the time youre paying principal and interest, will save you money.
- Changing from an adjustable rate to a fixed rate mortgage. An ARM mortgage can be a disaster from the start but many times it is the only option for some homeowners with less than a perfect financial history. Your payments can increase to any amount with an ARM but a fixed rate will lock in that rate. Of course if the lending rates decrease, you will have to go through a mortgage refinance in order to get that lower rate.
Keep in mind that you are never stuck with your mortgage rate. You can work with lenders to create a payment schedule that works with you and your lifestyle. If you are contemplating a mortgage refinance, you should stay current with your payments and work hard to never be late. This will improve your credit and give you the opportunity to change the terms when youre ready.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.