Advantages to Refinancing Your Home Mortgage

Mortgage rates are currently at all time lows. If you have good credit and money to put towards your loan principal, you should consider refinancing your home from a 30-year mortgage to a 15-year mortgage. The advantages of refinancing are that you save ahuge amount in interest payments and you will own your home free and clear 15 years sooner.

Take the following example:

Say you own $250,000 for a 30-year mortgage at 4.20%. Your monthly payments will be around $1,220.00 and your total interest payments will be around $190,000.

Lets say you were to refinance the home by putting $50,000 towards the loan principal and financing the remaining $200,000 on a 15-year mortgage for 3.45%. Your monthly payments will be around $1,420 and your total interest payments will be around $56,000. That saves you nearly $134,000 in interest payments!

Of course this assumes that you are able to put $50,00 towards the loan principal and be able to handle the $200 increase in monthly payments. However, if this is an option for you it is something you should strongly consider.