Mortgage interest rates in Queens, New York, and the rest of the USA are currently at rates lower than we have seen in 25+ years. These record-low mortgage rates mean there are some excellent opportunities out there to buy a home. But what about if you already have a mortgage on a home, and if you took out a mortgage anytime before 2020 there is a very good chance you are paying a higher interest rate than the current rates. This is when refinancing with a local NYC Mortgage Broker can be one of the best decisions you ever made.
Here are 5 of the top benefits to refinancing your home mortgage:
Lower Interest Rates
The most obvious benefit and the biggest driving factor to motivate someone to refinance their mortgage is to get a lower interest rate. This translates into significant savings in the short term and long term. A 1% lower interest rate on a 200k mortgage means you can save about $35k over the standard 30-year term, which is about $100 a month.
Another potential benefit is if your credit score has improved since you initially took out the mortgage you can qualify for better interest rates, especially if your FICO credit score is above 750.
The interest rate as mentioned above lowerest the interest portion of the mortgage, but you can also lower the principal payments of the mortgage when you refinance. When you refinance through most mortgage brokers in Queens you can have two options; 1 is to keep the same payoff date, in which case your principal payment won’t be lowered, the second is to extend the payoff date based on the new mortgage and year. This means the principle is spread out over more time, lowering what is due each month in order to pay it down.
Pay your Mortgage Quicker
The 30-year mortgage term is the standard for many people when taking out their first mortgage. It allows for the lowest payments and more flexible options based on your credit score and earning amount. But the longer the mortgage term is, the more you will pay in interest since you have borrowed money for a longer time. A second popular option is the 15-year mortgage term. Although the term is half of the time, the payments are not doubled. If you have already lowered the principal amount owed on your mortgage, choosing the 15-year term can allow you to pay off the mortgage much quicker than initially expected.
If you took a mortgage on your home with less than 20% down payment then you are likely paying PMI or private mortgage insurance. This is an insurance policy required since your down payment was not above the threshold, to help guarantee the lender you are worth the risk. If you have already paid 20% of the valve of the home during your first mortgage then when you refinance you can eliminate the need to pay PMI.
Low Interest Loan
There is an option when you refinance to borrow money from the equity you already paid in your home. Since mortgage interest rates are much lower than loan or consumer rates you can borrow this money at a far better rate. This may not be the best idea for everyone, as it is still a loan, but if the money is used as an investment, like to add an addition to your home, replace the roof, remodel, or anything that adds value, then it can be well worth it.
If you want to take advance of the low-interest rates we currently have in Queens, NY then contact the experts at:
R&J Mortgage & Loan Brokers Queens 116-16 Queens Blvd #204, Queens, NY 11375 (718) 520 7000