Why You Should Consider Refinancing Into A Short Term LoanSep 17 2012
By: Nicole Gates
While previously, many homeowners opted to do a streamline refinancing, meaning they took a 30-year fixed into a 30-year fixed with a lower rate, now we’re beginning to see many homeowners refinancing into a shorter term mortgage, hoping to get rid of debt sooner.
While you may experience an increase in your monthly payments by refinancing into a shorter term home loan, you may want to weigh that out with the other benefits that come with doing so, such as:
- Paying more towards your principal balance
- Building equity in your home faster
- Paying less in interest
- Locking in an even lower rate than with a longer loan term
- Owning your home faster
Like with any mortgage decision, deciding if refinancing to a shorter term home loan is a personal decision based off your lifestyle and needs. To see how much you can save by refinancing to a shorter-term mortgage, check out our refinancing calculator. Or talk to one of our home loan experts who can help you decide which option is best for you.