Increased Cash FlowPerhaps the most obvious benefit that accompanies a lower mortgage payment is the cash you can now put towards other uses. Whether you deposit this money directly into savings or even use it to fund a down payment on a new property, you may open up some new financial possibilities.
Pay Less InterestA portion of each of your monthly payments goes towards interest instead of paying off the principal of your loan. Through refinancing, you might be able to replace your current loan with a new one that has a reduced interest rate, thus lowering your overall mortgage payment. The savings this can entail over the life of your mortgage can be quite significant.
Access EqualityWhen you refinance, you can also apply for a cash-out home loan. In the process of getting a loan with lower monthly payments by getting a reduced interest rate, you can also get cash from your home equity, which you can then apply to other debts or expenses. This kind of refinancing typically results in a longer loan term.
How can I lower my mortgage payments through refinancing?
Your J.G. Wentworth home loan specialist will help explain how to lower your monthly payments through refinancing. Depending on your refinancing goals, you will have the opportunity to choose between several different methods, all of which come with specific advantages.
Switch your mortgage type
Through the refinance process, you may be able to switch from a fixed-rate mortgage to an adjustable-rate mortgage or the other way around. Depending on your unique circumstances, you might find that a different loan type can lower the amount you pay in interest.
Extend your mortgage term
Lengthening the term of your mortgage would likely also lower your monthly payments, but increase the amount of interest you pay in the long run. Some homeowners that refinance take advantage of lowered interest rates by reducing their mortgage term, allowing them to effectively pay the same amount every month while paying off their mortgage faster.
If you have several monthly payments from different loans, refinancing can help you combine them into one loan, allowing you to cut down on the amount of interest you pay every month. To learn more about J.G. Wentworth’s debt solutions, contact one of our home loan specialists.
Additional loan options
Since you first applied for your mortgage, some factors may have changed. Perhaps you improved your credit score, or the value of your house has risen. Developments like these can help you qualify for a range of new loan options.
Get rid of PMI
If you paid a down payment of less than 20% of your home’s value, you were likely required to include the cost of private mortgage insurance, or PMI, with your monthly payments. During the refinance process, if you have at least 20% equity in your home, you may have the chance to get rid of this PMI. You might also be able to eliminate PMI if the value of your home has risen enough.
Contact a Home Loan Specialist Today
As a direct lender, J.G. Wentworth has all the resources necessary to assist you with the refinance process from start to finish, and our award-winning customer service has earned us an A+ rating with the Better Business Bureau. If you have any additional questions about refinancing or mortgages in general, contact one of our home loan specialists or browse the extensive resources available on our website.
J.G. Wentworth serves as a leader in the industry with our broad range of financial services. We have everything you need achieve your home loan goals. To begin the refinance process, get a rate quote today.