8/7/2024

Lowering Your Monthly Mortgage Payments with Refinancing: What You Need to Know

Are you feeling the pinch of high mortgage payments each month? Refinancing your mortgage could be a smart move to help lower those payments and make your finances more manageable. Here’s a quick guide on how refinancing might benefit you, along with some important precautions to consider before taking the plunge.

Why Refinance?

Refinancing your mortgage involves replacing your current loan with a new one, often with better terms. Here’s how it can lower your monthly payments:

1. Lower Interest Rates: If interest rates have dropped since you first took out your mortgage, refinancing can help you lock in a lower rate, reducing your monthly payments.
2. Extended Loan Term: Extending the term of your loan can lower your monthly payments, though it may increase the total interest paid over the life of the loan.
3. Switch from an Adjustable to a Fixed Rate: If you currently have an adjustable-rate mortgage, switching to a fixed rate can provide stability and potentially lower payments.

Precautions Before Refinancing

While refinancing can be advantageous, it’s important to approach it with caution:

1. Evaluate Closing Costs: Refinancing often involves closing costs that can add up. Be sure to calculate these costs and compare them against the potential savings.
2. Check Your Credit Score: A good credit score can help you secure a better interest rate. If your credit score has improved since you took out your original mortgage, you might be in a better position to refinance.
3. Consider Your Loan Term: Extending the term of your loan might reduce monthly payments, but it could mean paying more in interest over the long run. Make sure you understand how the new term will affect your total payment.
4. Assess Your Current Loan Terms: Before refinancing, review your existing loan terms to ensure that you’re not incurring any penalties or additional costs that could outweigh the benefits of refinancing.
5. Consult a Professional: Refinancing can be complex. Consulting with a mortgage advisor or financial expert can help you navigate the process and make the best decision for your financial situation. For questions about lending & refinancing at MTC Federal, contact our team.

Get Started with MTC Federal

At MTC Federal Credit Union, we're here to help you explore your refinancing options and find a solution that fits your needs. With our commitment to “Higher Expectations and Lower Rates,” you can trust us to guide you through the refinancing process with the best possible terms. For more information and to get started with a refinance, contact us today. Our team is dedicated to helping hardworking people like you achieve financial wellness.

Contact MTC Federal Credit Union and take the first step towards lowering your mortgage payments and improving your financial journey.