Some homeowners who have been seeking a lower mortgage payment have been able to refinance and obtain a lower mortgage rate, which has brought a lower monthly mortgage payment to their home loan. Typically, a 30-year fixed rate mortgage is one of the more common home loans to which these homeowners will refinance in order to obtain a lower mortgage rate.
It should be understood that a homeowner will not be guaranteed a lower monthly mortgage rate or lower monthly payment simply because they refinance. A homeowner’s credit score and the amount of equity they have built in their home will factor into whether they get a lower mortgage rate and payment.
However, for those homeowners who qualify this can be a wonderful way to make their home more affordable. Some homeowners are struggling to make their mortgage payment or simply make their financial ends meet due to either a loss of income or a cut in wages at their place of employment. Yet, these homeowners may not be in a bad enough financial position to qualify for a home loan modification.
It will be advisable for any homeowner considering refinancing to look at their personal financial situation and make sure that this is the best option for them. Also, there are costs that come with refinancing and a 30-year fixed rate mortgage may cost more over the lifetime of their home loan than some other mortgages. It will be important for a homeowner to factor these pros and cons into their equation before they refinance their home loan.