Reasons to Refinance
Lower your current mortgage payment.
You may be able to get a lower interest rate because of changes in the market conditions or because your credit score has improved. With a lower interest rate, your monthly mortgage payment decreases. A lower interest rate also may allow you to build equity in your home more quickly.
A small decrease in interest rates can mean a big decrease in your monthly mortgage payment. For example, a monthly payment (principal and interest) for a 30-year fixed rate loan of $200,000 at 5.5 percent is $1,136. For that same loan at 6 percent, the payment is $1,199 – a difference of $63 per month or $756 per year or $7,560 during a 10-year period.
Check out our “Should I refinance?” calculator to see how a new rate and term could lower your monthly mortgage payment.
Adjust the term of your mortgage.
A mortgage with a longer term for payback can reduce the amount that you pay in monthly mortgage payments. On the other hand, shorter-term mortgages generally have lower interest rates. Plus, you pay off your loan sooner, which reduces your total interest costs. As an example, the total interest costs for a fixed-rate loan of $200,000 at 6 percent for 30 years would cost $231,640 in total interest. For a fixed-rate loan of $200,000 at 5.5 percent for 15 years would cost $94,120 in total interest.
Consolidate debt from other loans or credit cards.
At The Federal Savings Bank, we understand that debt can pile up over months and years. Consolidating those debts into a lower rate tax-deductible mortgage refinance is a smart way to gain control over your finances and put money in your pocket. Our expert mortgage bankers will help you refinance to some of the lowest rates in decades, and get cash to pay off your higher-interest debt. We can show you how to make one, low monthly payment instead of several, and pay less overall every month. Unlike credit cards, the interest is usually tax-deductible.
To learn more about refinancing, call to speak with one of our expert mortgage bankers or if you're ready, get started today. We’re here to provide you with a clear path to home ownership!Apply Now