Refinancing your mortgage can give you the option to pay off your home sooner, but that’s not the only benefit. You can also access the equity that you’ve gained or lower your current rate when the market allows. Refinancing your mortgage could be a smart financial decision.
Because you’re paying off your loan in half the time, the monthly payments are higher on a 15-year mortgage, but rates are lower than a 30-year mortgage. Ultimately, you’ll save more than a decade’s worth of interest payments.
Shorter loan, less interest
It’s simple math. By paying off your loan in half the usual time, you’ll save more than a decade’s worth of interest payments. In the first 15 years of a 30-year fixed-rate mortgage, around two-thirds of your monthly payment gets eaten up by interest, and whatever’s left over gets applied to the principal. With a 15-year mortgage, it’s the opposite. Two-thirds of your payment goes toward paying down your balance, while only a third goes to interest.KEEP READING »
What’s the deal with Private Mortgage Insurance?
If your down payment is less than 20 percent of the value of the home you'll most likely be required to carry private mortgage insurance.
Jumbo home loans: What you need to know
Upgrading your home can carry a higher price tag. A jumbo loan helps homebuyers compete in a hot market and borrow a higher amount than a traditional home loan. Learn more about this mortgage lending option and what makes OCCU jumbo loans unique.