Often times, someone will refinance their mortgage for a couple of different reasons. Simply, some may want to pay less on their interest by refinancing to a better rate. This is highly common. In addition, many others will refinance to a fixed-rate due to wanting some consistency.
Refinancing to get a better rate is a common method of potentially shaving thousands of dollars off of your loan. Instead of spending money on interest, you’ll be able to put it towards savings or invest it. It must be noted that this is not a free service. Refinancing involves some of the same fees you paid when you originally received your mortgage: loan origination fees, appraisal fees and escrow or title fees. Although, you can still save money in the long run by getting a better enough rate.
Secondly, you can switch your adjustable rate mortgage, or ARM, to a fixed rate mortgage. The reason for doing this maybe because you may realize that you want some consistency and financial stability. Maybe the market has been too up and down and you are not enjoying the differing rates month to month. Switching to a fixed rate mortgage can resolve that for you.
Lastly, if you want to pay off your mortgage sooner rather than later, you can change the terms of your mortgage to get a shorter length. This will result in your payments being a little higher from month to month, so you’ll want to be sure that you can afford those higher monthly payments. Contact your loan officer if you’re interested in refinancing.