Lauren Cobello » Budgeting » Budget Tips and Tricks » How to Save Money on Your Mortgage with Refinancing
Are you wondering How to Save Money on Your Mortgage with Refinancing? Finding a lender can be a complicated process that can be done very easily through an online lender marketplace like Refily, but we will get more into that later.
There are many benefits to refinancing your mortgage, including the opportunity to consolidate all of your loans into one and take advantage of lower interest rates. In order to make sure you’re getting the best deal possible, it’s important to understand the different types of refinancing options available and how they work so you can find the right fit for your needs! But first, let’s break down some of the basics:
Refinancing a home is the process of taking out new financing on a property, which can lower your monthly payments and reduce the amount of interest you pay over time. A new lender will agree to buy your current mortgage from your current lender- this is called “purchasing” or “funding” the loan.
In exchange for the loan being funded, you sign a new Promissory Note agreeing to repay the loan over a specific period of time. Companies that purchase loans are called “sponsors.”
The Standard benefits are lower monthly payments and reducing the amount of interest you pay over time.
There are some emotional benefits as well. You can consolidate all your loans into one and take advantage of lower interest rates, making the cost of your mortgage more affordable while giving you peace of mind of having one payment instead of multiple. Which can also free up extra cash for other investments.
Consolidating other debts into a HELOC is a great way to save money and get out of debt, which also can help you learn how to pay off your mortgage fast.
1.) Fixed-rate loans. Low to moderate monthly payments, but you’ll pay more in interest over the life of the loan. You can’t take advantage of low-interest rates when they are available, but your payments are fixed for the duration of the loan.
2.) Adjustable-rate mortgage (ARM). Low initial monthly payment followed by a series onerous increase after 1-5 years, usually 5%. However, these often have slightly lower interest rates than fixed-rate mortgages. One drawback is that it is difficult to know how high the monthly payments will be once this initial period expires because rates could go either way – meaning an increase or decrease!
3.) Interest-only Loans. Some people want to save money when they buy a house. This is when an interest-only loan comes in. The price of the house will be lower because you owe less and you do not need to pay back the money yet. You can start paying off the mortgage after 10 years or so, but if you cannot pay it back, your home could go away and someone else might get it instead.
There are a few key points to consider when deciding if refinancing is the right option for you. Here are some questions to ask yourself. How long are you plan on staying in your home?
The process of finding a lender using Refily is relatively simple and straightforward. First, you’ll need to provide your information. Once you enter in your information, Refily matches them to a lender who would need to get in contact with.
Next, once you speak to a lender, you will need to provide them with your Employment Verification Document (W-2 form) and order a credit report. Finally, working with the lender you chose, choose the loan term and the type of loan you want, and once everything has been processed, agree to the terms and conditions for the loan! Keep in mind that the lender qualifies you for the loan, rather than Refily. Refily simply matches you with a great lender.
Refinancing a home can make your mortgage cheaper if you find a lender that offers a lower interest rate than your current one. This could save you hundreds or even thousands of dollars over the life of your loan!
When you refinance your house, yes, you will save money. That is because you will be paying a lower interest rate and less interest over the duration of your loan. Keep in mind though that you will start at the beginning of the amortization table. (See example of an amortization table below)
An amortization table is a chart that shows how much of a loan has been repaid with each payment. It also shows the total interest paid and the amount still owed until the loan is fully repaid. When you start over on the amortization table, this means that you will be starting from the beginning of the table. This means that you will be paying off your loan for a longer period of time, but you will also have a lower monthly payment.
By using a lender marketplace like Refily when you are ready to refinance, you can easily save a of time. Most people dont’ now that you don’t have to use your current bank.
When you use a marketplace like Refily you can easily plug in your numbers and do a quick search and find the best lender for you! Refily matches you with a lender, then you work directly with that lender to get your financing. You don’t have to make dozens of phone calls, they do all the searching for you. You don’t even have to put in your Social Security number to get matched to a lender!
The next step of this process is to review the types of refinancing to find the option that works best for you. When you apply to refinance, your lender asks for the same information you gave them when you bought your home. They’ll look at your income, assets, debt, and credit score to determine whether you meet the requirements to refinance and can pay back the loan.
Make sure you get your documents together BEFORE you start this process.
Here are some of the documents that you will need:
After you’ve found a lender through Refily, connect with that lender so that you can submit your application and lock in your Interest Rate.
I wish Refily had been around when I went through my nightmare of a housing situation. I probably wouldn’t have had to short sale and get that ding on my credit report. But I wasn’t educated enough at that time to know that there were other options. I didn’t know that I didn’t need to go through my current lender to refinance.
If you’re looking for a great way to save money and get out of debt, finding a lender through Refily to refinance your mortgage is the perfect option. Although it may seem daunting at first, this process can be relatively simple when you know what steps to take – from applying for a loan to closing on your new home!
This in-depth article has given you all the information necessary so that you can confidently apply today. Start enjoying lower monthly payments sooner rather than later.
Which benefits helped convince you when you were considering refinancing?
Head on over and check out Refily by clicking on this link, and check your estimated savings.
*This post was sponsored by Refily – all opinions are 100% my own. I always get excited to work alongside amazing companies to bring you some great content! NMLS# 167283