Many homeowners who have been refinancing to a 30-year fixed rate mortgage have been doing so for a number of reasons. Interest rates, at the present time, are very low and affordable despite having increased slightly since the record lows that were available in months past. However, despite this increase in mortgage rates, homeowners are still getting an affordable rate when they refinance their home loan.
Homeowners who are refinancing to a 30-year fixed rate mortgage are doing so to not only lock in a lower monthly mortgage payment but they are also seeking to refinance for a lower mortgage rate in the hopes that they can get a lower monthly mortgage payment as well. Many homeowners who have been struggling to make ends meet financially have benefited from refinancing and getting a lower mortgage payment.
Typically, in the past, homeowners would refinance so that they could take advantage of equity that has built up in their home and they would use the money they got back when refinancing for a variety of expenses. While many homeowners still do this, more financially responsible homeowners are using any money they receive from refinancing to pay on their home’s principal amount.
It’s important to understand that the interest rate a homeowner gets will be dependent upon their credit score and their home’s equity. A homeowner is not guaranteed a low interest rate or a low monthly mortgage payment simply because they refinance and any homeowner considering refinancing should look at their financial situation to make sure they can afford the costs of doing so.