Housing reports from a variety of sources, like CNBC, have indicated that refinancing is on the rise as home loan interest rates stay low. Many homeowners have been using refinancing as a way to either make their home more affordable or get out of debt faster and low interest rates have brought about more opportunities for homeowners looking to obtain a more affordable mortgage payment.
There have been homeowners who use refinancing as a way to simply lock in a low interest rate, which often brings a lower monthly mortgage payment. Homeowners who can afford refinancing in this instance may have been able to avoid foreclosure since they were granted a lower monthly mortgage payment along with their interest rate. Home loan defaults have been a problem in the past but refinancing opportunities have allowed some homeowners to lower their home loan costs to a much more affordable level.
However, there have been homeowners who have been refinancing to short-term mortgages, like a 15-year fixed rate mortgage, in order to get out of mortgage debt faster. Interest rates on these types of mortgages have been low as well, so homeowners who have been able to afford the higher monthly mortgage payment that comes with a shorter term mortgage have been able to not only get a low interest rate on these mortgages but get out of mortgage debt in a timelier manner and at less cost overall.
While refinancing is on the rise and interest rates on home loans are quite low, not every homeowner will benefit from refinancing or be able to obtain a more affordable home loan payment. Yet, homeowners who can afford the cost of refinancing or a higher monthly payment for shorter term mortgages, who have equity in their home, and a good credit score may be able to benefit from these current refinancing opportunities that are being offered by many mortgage lenders across the nation.