Get a lower interest rate
No one wants to pay more in interest than they have to. But you don’t always get to pick where interest rates are when you apply for a home, auto, or other personal loan. Fortunately, when rates drop, you may be able to refinance to take advantage of those lower rates, saving you money in the long run.
Reduce your monthly payment
With inflation where it is, money can be tight. But paying less for your loans each month can help you ease the burden on your budget. Refinancing for a lower interest rate can translate to a lower amount owed overall, which can be a good way to reduce your monthly payment. Or you can refinance your remaining loan balance into a loan with a longer term, lowering your monthly payments that way.
Secure a fixed rate
If you took advantage of a low variable rate when you first applied for a loan, but now the rate has gone up instead of dropping further, see if refinancing is possible for you. You might be able to refinance from a variable rate to a fixed rate instead. That leaves you with no surprises or sudden changes in your interest rate, so if rates rise again, you’re locked in.
Get money for improvements
If you’ve built up some equity in your home since you bought it, either from an increase in value or paying off the principal with your monthly payments, you can use that equity you’ve gained in your home to apply for a Home Equity Line of Credit (HELOC) or a home equity loan. This can give you the cash to take care of that renovation, get your new roof put on, or make other improvements around your home.
Say goodbye to private mortgage insurance
The same goes for private mortgage insurance. Most people who have a conventional loan with less than 20% equity in their homes have to pay private mortgage insurance. But when you’ve paid that much of your principal down (including your down payment) or your home’s value goes up, you can refinance to kick that extra monthly payment to the curb.
Cash out your equity
Sometimes, life means that you need a big chunk of cash at once. It might be for a renovation, college tuition, getting out of debt or unexpected home upkeep. Really, the sky’s the limit. A cash-out refinance lets you cut a check from the equity in your home while you refinance to a whole new mortgage.
When you’re ready to refinance, RMCU loan officers can help. Don’t let concerns about your credit or uncertainty over the process keep you from applying. Even if you don’t qualify now, the team at RMCU can help you get there. Reach out to one of the pros and see where you can go with your loan.
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