Benefits of Refinancing with a Fixed-Rate Mortgage
Whether you’re looking out for your long-term interests or it’s more beneficial to swap your current mortgage with a shorter loan term, refinancing to a 15-year or 30-year fixed-rate mortgage may be the solution for you.
PrimeLending offers fixed-rate mortgages for both conventional and government-backed loans, which can be used to purchase or refinance a home. Here are a few reasons fixed-rate mortgages are a popular option among homeowners:
- Interest rate stability
- Monthly payment stability
- Lower monthly payments with 30-year option
- Tax deductible interest
- Down payment assistance options*
When deciding on whether a 15-year or 30-year fixed-rate refinance works for you, here’s more info to consider:
- 15-year fixed-rate mortgage: Considered a short-term mortgage, your payments will be a bit higher since they’re not spread out over a longer period of time. But because the term is shorter, you pay a lot less toward interest and can save thousands over the life of the loan. For the same reasons, more of your monthly payments will go toward principal sooner, and your home’s equity will increase at a much faster rate. In essence, it costs less to borrow the money.
- 30-year fixed-rate mortgage: Considered a long-term mortgage, this offers some of the lowest monthly payments available since they’re spread out over a longer period of time. However, because you make more payments, you pay more interest over time. This is a great choice if you plan on staying in the home for a long period of time – at least seven to ten years. But even if that’s not your plan, the low monthly payments can still make this a smart choice. You just won’t build equity as fast.
If you think a fixed-rate mortgage refinance is a great option for you, contact a PrimeLending loan officer to learn more.