6 Reasons First Time Home Buyers Should Consider Refinancing Their Mortgage

As a first time home buyer, you may already know that you can refinance your mortgage to get a lower mortgage rate, thereby saving money on your monthly mortgage payments. However, there are other reasons to refinance as well.

Here are 6 additional reasons to consider refinancing your mortgage loan. Please note, there are fees associated with refinancing your mortgage loan. Therefore, as with all financial decisions, please speak with your financial advisor to make sure refinancing will be the right choice for you. That said, let’s begin.

 Change mortgage type – You can refinance your adjustable rate mortgage loan and get a fixed rate mortgage loan like an FHA or conventional.

 Get Rid of Mortgage Insurance – If you put less than 20 down on your conventional mortgage loan, you can refinance to get rid of the private mortgage insurance you are paying. For FHA loans, as of June 2013, if you put 10% or more down, the mortgage insurance should drop off after 11 years.

If you have a USDA loan, may have to wait until you have 20% equity before you can refinance to remove the monthly guarantee fee.

 Divorce – You can refinance to remove your ex-spouse from the mortgage if you own the home jointly. 

 Increased Credit Score - Are your credit scores higher now than when you purchase you home? if they are, you can refinance your mortgage to get a lower rate when available.

 Loan Term Change -  Do you have a 30-year mortgage but would like to change it to, let say, a 15-year mortgage? you can, by refinancing your current mortgage.

We at First Home Houston is always looking out for your best real estate interest. As always, we thank you for stopping by. Until next time… Diana.

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