Choosing Financial Freedom

Six Problems You Can Avoid Dealing With Through A Home Refinance

16 September 2021

Aubree Mccoy

There are many possible reasons why you might be interested in refinancing your home loan. A refinance can solve many problems for you and make it so that being a homeowner involves fewer headaches. The following are six problems you can avoid dealing with through a home refinance. 

Having to continue paying a high interest rate on your home loan

Probably the best thing a home loan refinance can do for you is result in a lower interest rate. Perhaps your credit score is higher now than it was when you originally took out your mortgage. This means that you may now be eligible for a lower interest rate that will bring down the costs of homeownership. 

Making payments on your home loan for a long time into the future

Refinancing could be a good idea for you if you want to get out of debt as quickly as possible. If you refinance, you can shorten the life of your home loan so that you pay it off sooner. This is the fastest way to get out of debt and own your home outright. 

Paying a monthly mortgage payment that is unaffordable for your budget

Another thing you can possibly do when you refinance is to get a lower monthly payment for your home loan. If you've been struggling to make your mortgage payment every month, refinancing for a lower payment could be the best way to ensure that you don't get behind. 

Being unable to qualify to borrow money with your home equity as collateral

Continuing to pay your original home loan down could make it so that you can't use all the equity that you have in your home. When you refinance, you can free up some equity and make it easier to qualify for a home equity loan if you need some cash down the road. 

Having many debt payments to make each month

When you refinance your home loan, you could potentially borrow extra funds to pay off some of your debts. This can make a refinance a good way to consolidate your debt and simplify your monthly debt payments. 

Having an ex-spouse on your mortgage loan

If you've recently divorced, you might want to get your spouse off of your mortgage because they are no longer living in the marital home. When you refinance, you can change the terms of your loan so that it is only in your name rather than being in the name of both you and your ex-spouse. Reach out to a professional to discuss refinancing. 

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