Top 5 Reasons to Refinance Your Mortgage in 2022 Before It’s Too Late

Mortgage refinancing refers to paying off an existing mortgage with a new loan. The new loan may have different terms, such as a different interest rate or maturity date.

It’s no secret that mortgage interest rates are at an all-time low. In fact, according to Freddie Mac, the average 30-year fixed-rate mortgage was just 3.56% in February 2019, the average 15-year fixed-rate mortgage was 2.62 %, 5-year Treasury-indexed hybrid adjustable-rate mortgage was 2.57%.  If you’re like many homeowners there, you may be wondering if now is the time to refinance your mortgage. While refinancing can be a great way to save money on your monthly payments, it’s essential to weigh the pros and cons before deciding.

If someone is thinking of mortgage refinance, they should do so sooner rather than later. Interest rates are still low but are predicted to rise in the next few years. So if someone waits too long, they may not get a reasonable interest rate and could end up paying more in the long run.

Mortgage refinance can be a great way to save money and lock in a low-interest rate.

Here are the top five reasons to refinance your mortgage in 2022:

1. Lower your mortgage interest rate

Mortgage refinance rates have decreased considerably in the last decade, as the economy has matured and entered a slower pace of growth, which implies that the economy is developing and will continue to keep rates low for some time.

The longer you pay off your mortgage, the more money you save. The typical interest rate on a 30-year fixed-rate mortgage was 4 percent in late 2018. That means that if you can stretch out your payments or make larger ones for a year or two, you’ll have to spend less each month and will owe less in interest.

Refinancing your mortgage to a lower rate might save you money, so you’ll have more emergency cash if you need it. Keep in mind that rates vary depending on the loan product and lender. Your present lender might give you a lower interest rate if you stay with them.

2. Consolidate debt

Cash-out has grown in popularity because of the low-interest rates available on mortgage refinance rates. A cash-out refinance you to use the equity in your home to reduce debt by consolidating it. The amount of money your mortgage balance will grow depends on how much equity you want to drawdown.

There are several things to consider before taking out a cash-out refinance. Do you know how much equity you have in your home? On an FHA loan, mortgage refinance can help you cancel mortgage insurance, but it may also force you to pay mortgage insurance if you merge debt and take out over 20% of the home’s equity.

It’s also critical to have a plan for reducing your overall debt in the future, such as credit cards and automobile loans. Zambon says he tries to understand his client’s objectives and needs to assist them in obtaining the most acceptable solution for working with his customers.

3. Take advantage of a shorter-term mortgage

If you don’t plan to remain in your home for over five years, you might refinance a shorter-term mortgage. Shorter-term mortgages typically have lower mortgage interest rates than 30-year fixed-rate mortgages.

Keep in mind that when you refinance to a shorter-term mortgage, you’ll pay more interest over the life of the loan. But if you plan on moving within five years, a shorter-term mortgage could be a good option for you.

“A lot of homeowners are taking advantage of the low mortgage interest rates and refinancing into 15-year mortgages,” says Erin Lantz, vice president of mortgages at Zillow. “This is a great way to pay off your home sooner and save money on interest.”

4. Get cash to remodel your home

Homeowners can also use a cash-out refinance to get money for renovations or other expenses. For example, if you need to replace the roof on your home, you coul