What are Refinanced Mortgage Loans?
When a homeowner refinances their mortgage loan, they are doing so to obtain a better interest rate and term. Refinancing a mortgage loan is an important step for receiving the best interest rate and term possible. Homeowners with a high credit score will receive many benefits when refinancing. Good credit history will allow homeowners with a variable loan rate to be converted into a fixed loan rate. This will inevitably allow for a lower interest rate.
If you are finding it difficult to make mortgage payments, refinancing is a great option. With the right guidance, refinancing will allow you to receive a better rate and term. Without the right guidance, refinancing will not be as beneficial and in some cases, risky. This is why it is extremely important to work with a qualified mortgage lender or advisory service.
Benefits of 20 Year Fixed
- Better Mortgage Rates
20 year fixed refinanced mortgages will offer better mortgage rates overall. This is usually the main reason why homeowners consider refinancing. If mortgage rates have dropped, refinancing is a good option. This allows homeowners to receive a new home loan with current low rates. Another reason a homeowner may want to refinance is improved credit score. If a homeowner’s credit score has recently improved, they may be able to save money when refinancing.
- Lower Monthly Payments
Lower interest rates translates into overall lower monthly payments. If your new refinanced mortgage has the same date for payoff as your old mortgage, you will receive lower interest rates. If a homeowner extends their payoff date, they will owe less in principal.
- Shorten Your Term
Most homeowners begin with a 30 year mortgage. By switching to a 20 year fixed mortgage, you are able to save more and pay off the mortgage quicker. By shortening the loan term, you are saving more in interest.
