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Refinance Your Mortgage To Lower Monthly Expenses

TLDR

What You Need To Know

  • You can reduce your monthly payments by refinancing your home loan.
  • For those with a good credit score, moving a mortgage to a lower interest rate is a good idea.
  • It can help to reduce your monthly costs in the short term.

Contents

Get movin’! with Rocket Mortgage

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What do you want to do?

So you’re in your feels about buying a new home? 💜
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Looking to refinance for a better rate or extra cash? 💸
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The property is a… What kind of property?
I intend to use it as my… How do you use it?

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Help us find the best rate for you.

Have a second mortgage?
I’m planning to buy…
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Determining Your Credit Score
  1. Your credit score is a three-digit number that’s used to predict how likely it is you’ll pay back money you borrowed.
  2. The score generally ranges from 300 (low) to 850 (excellent). It’s calculated by looking at your previous credit history.
  3. You can check your credit report to find the number or use a free credit tool. You can also plug in your best guess.

It’s 💯 okay if your credit score isn’t perfect! Wow ⭐ looks like you’re in great financial shape!

It’s 💯 okay if you have another mortgage or an imperfect credit score! It’s all good if you have a second mortgage (or not).

You’re almost there. Just a few deets needed.
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First-time home buyer?

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In the meantime…
Back to the content you came here for! 👍
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Feel at Home Settle in with home improvement tips & tricks. 🔨

There are many reasons why homeowners might like to refinance. Often, it is done to access a lower interest rate and, as a result, reduce the costs of a mortgage. For cash-strapped consumers needing to ease the pressure on their monthly expenses, however, refinancing can be an especially good option.

First-time homebuyers are often the most financially stretched, but mortgage repayments usually become easier over time. Surprise expenses or a sudden reduction in income can bring financial struggles, though. Refinancing could help in such circumstances.

Reduce Your Monthly Costs

For those with a good credit score, moving a mortgage to a lower interest rate is a good idea. Even for those who can’t access a competitive rate, refinancing can still help by extending the term of your mortgage. While this means that the mortgage becomes more expensive, with more interest accumulating over time, it can help to reduce your monthly costs in the short term.

For example, having paid a decade of repayments on a $300,000, 30-year fixed-rated home loan with a 4 percent interest rate, you would be left with approximately $235,000 to pay. This works out to a monthly cost of around $1,430. Refinancing the loan back to a 30-year term, even at the same interest level, would cause your monthly payments to drop to $1,120 and give you an extra ten years to pay off the mortgage.

Save Money

In extreme cases, refinancing this way can make a huge difference to borrowers who might be worried about potential foreclosure on their home. If you can access a lower mortgage rate, such a move could also save you money.

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