If you feel that you are struggling to pay your bills, one option is to have your home refinanced. Then, you'll likely be able to benefit from being able to make lower monthly payments. However, it is important to know when it might be appropriate for you to refinance your home.
Lower Your Interest Rates
In some cases, refinancing just makes sense. For example, if your payment length is the same, you'll be paying less overall because you'll have a lower interest rate. However, make sure that the fees aren't so high that you end up owing more than you would otherwise owe.
Extend Your Loan Term
If you plan on extending your loan term, this makes the most sense if you plan on staying in your home for a long time. If you are thinking about eventually selling your home, it would make more sense to keep the same loan term.
Eliminate Private Mortgage Insurance
You may be losing money if you put less than 20% down because you may be forced to pay for insurance. Private mortgage insurance protects the lender in the event that you default on your insurance. When you refinance, you may be able to eliminate your private mortgage insurance premium, leading to one less bill.
Shorten Your Loan Term
If you want to finish paying off your home faster, it might make sense to refinance. This is especially true if you're able to obtain a lower interest rate and able to make the same monthly payment but while paying off your debt sooner. Once you have paid off your house, any additional money can go toward other bills you have to pay.
Escape Interest Rate Hikes
When you originally chose an adjustable rate mortgage, you may have paid less for your home originally. But now, you're facing mortgage rate hikes, and your interest rates have shot through the roof. Fortunately, you can still switch to a fixed-rate mortgage.
Receive Mortgage Assistance from the USDA
The USDA Streamlined Assist Program is offered by the United States Department of Agriculture. Those who have low or moderate household incomes are able to have their mortgages refinanced while living in a rural area.
If you had considered this program in the past but were turned down, you should reconsider it. The requirements for the USDA Streamline Assist program have been relaxed, and you might be able to qualify.