If you’re looking for ways to improve a less-than-desirable mortgage, there is a solution out there: it’s known as mortgage refinancing. Depending on your situation, refinancing your home could save you money and give you greater flexibility. Below, this mortgage refinancing company in La Crosse, Wisconsin is going to review some of the things you should know about refinancing a home.
Switch to a Fixed-Rate Mortgage
When you choose an adjustable-rate mortgage, you may start with a fixed interest rate for the first few years. However, the rate can then change based on various factors, including the mortgage market and the rate at which banks lend to one another.
What's in this article?
The bottom line is that adjustable-rate mortgages pass the risk of rising interest rates onto you.
Switching to a fixed-rate mortgage could be a prudent financial decision. It can help prevent the risk of having your monthly payments rise as interest rates go up.
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Lower Your Interest Rate
If your mortgage has a relatively higher interest rate, mortgage refinancing in La Crosse, Wisconsin could be a wise financial decision if it lowers your interest rate or shortens your amortization schedule.
If you can find a mortgage with a 1–2% interest rate drop, you should investigate. However, only refinance if you intend to stay in your La Crosse home for long enough to recoup the refinancing closing costs.
Shorten Your Mortgage Term
If you currently have a 30-year fixed-rate mortgage, refinancing is a great way to lock in a 15-year fixed-rate mortgage — ideally, with monthly payments less than 25% of your monthly net salary. However, if the interest rate on your current mortgage is low enough to compete with the 15-year rates available, make sure refinancing to shorten your mortgage term will not cost you more.
You can run your numbers through a mortgage payoff calculator to see what your monthly payment would be on a 15-year fixed-rate mortgage.
Consolidate Your Second Mortgage
Some La Crosse, Wisconsin homeowners who have second mortgages want to refinance it along with their first one. However, this isn’t always the best choice.
If your second mortgage balance is less than half of your yearly net earnings, you should just pay it off with the rest of your debt.
However, if your second mortgage balance is more than half of your yearly net earnings, you could roll your second mortgage into your first mortgage refinance. This will put you in a better position to deal with any other debts you may have before pooling your resources to pay off your mortgages.
Is Mortgage Refinancing Worth It?
If you were already thinking about refinancing your La Crosse home, the low rates could not have come at a better time. Securing a mortgage with a 1-2% lower interest can make a BIG difference in your monthly budget and ability to pay off your mortgage earlier.
All you need to do is make sure that you stay in your home long enough for your refinancing savings to offset the cost of the refinancing — including application fee, appraisal fee, attorney fees, title search and insurance.
Need Professional Assistance for Your Mortgage Refinancing in La Crosse, Wisconsin?
Are you ready to partner with the premier mortgage refinancing company in La Cross, Wisconsin? If so, you can connect with the home loan specialists at Compass Mortgage to learn more about refinancing your mortgage and whether it’s the right decision for you. To get started, contact us at (877) 793-9362 or send us a form via our website.