Reasons to Refinance

If you’re looking for ways to save money, refinancing your current mortgage to a lower rate is a great place to start. But, getting a lower rate by refinancing is not the only reason you may choose to refinance. Here are a few others:

• Refinance to a fixed-rate mortgage. If you’re currently in an adjustable rate mortgage and looking for stability in your finances switching to a fixed-rate mortgage could be the right choice for you.

• Consolidate. If you have another mortgage, such as a home equity line of credit, which may be at a low rate now, some are looking to consolidate their debt into one payment to avoid the risk of increased rates in the future.

• Changing family situations. If you’ve recently been divorced or if there has been a death in the family, refinancing can be a way to remove a joint owner from the loan.

• Shorten the loan term. While a 30-year mortgage will give you lower monthly payments, you’re paying a tremendous amount of money in interest. If you’re able to afford the higher payments of a shorter term, such as a 15-year mortgage, you will save a significant amount in interest in the long run.

Whatever reasons you may have for refinancing, now is a great time to take advantage of historically low mortgage rates. Take the time to speak with your local credit union or bank about your situation and the available options you have—it could save you money now and into the future.

Editor's Note: Alyssa Karl is the author of a twice-monthly column on Patch. E-mail her at akarl@heartlandcu.com.