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6 Reasons to Refinance Now

Read Time: 2 Minutes Date Published: June 17, 2021

Thinking about refinancing your home loan, but not totally committed yet? Here are six good reasons why homeowners refinance their loans and why you may consider doing so too.

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1. Reduce Your Interest Rate
When rates drop, you could reduce your monthly mortgage payment. For example, on a $200,000 mortgage with an original interest rate of 5.5%, refinancing to a 30-year fixed rate mortgage at 4.0% would reduce your monthly payment by $679.34/month. Use our refinance calculator to run the numbers for your own scenario.

2. Shorten Your Loan Term
If you’ve been making mortgage payments for several years, you may be able to refinance to a shorter loan term and pay about the same amount each month. For some homeowners, it may even be possible to shorten your loan term AND pay less each month. As a borrower, you should inquire about your options and term availability to see if refinancing makes financial sense for you.

3. Consolidate Your Home Loans.
If you have both a mortgage and home equity loan or line of credit, consider refinancing both loans into one. Depending upon the interest rates, you may be able to lower your total monthly payment amount and/or the total amount of interest you pay over the life of your loan.

4. Pay Other Major Expenses or Debts
There is another option available to tap into your home’s equity to get the cash you need. Newrez Home Equity Loan†† is our new loan program built specifically for homeowners looking to tap the equity in their house without giving up their current mortgage. Keep your primary mortgage interest rate on your current loan when you secure a second mortgage. Just like a cash-out refinance, your money can be put toward home debt consolidation, as well as for projects, education costs, and more. 

5. Eliminate or Reduce Your Mortgage Insurance
If you pay private mortgage insurance (PMI) each month, refinancing may be a smart way to eliminate PMI, especially in this market where home values are rising nationwide. The equity in your home may have increased to 20% or more, in which case you should be able to refinance to a conventional mortgage that doesn’t require PMI. In some cases, you may be able to lower your loan balance as well as avoid paying PMI.

6. Explore Your Loan Options
If your current mortgage isn’t working for you, consider refinancing to stop sweating the monthly mortgage payment and regain your financial control. Refinancing may enable you to switch to an entirely different home loan with unique benefits.

With so many refinancing options available, you may want to throw open that refinancing window! Get in touch with one of our loan advisors and discuss your mortgage situation or apply now here. They will be able to answer any questions and help you find a solution that’s just right for you.

For even more helpful mortgage tips and news be sure to check out our refinance articles.


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References:

*https://www.corelogic.com/intelligence/homeowner-equity-insights-q4-2023/

Learn more in our other educational series.

We’ve assembled a treasure trove of jargon-free information to demystify home-financing and arm you with valuable insights and actionable options.

Why Newrez?

Newrez believes the lending business shouldn't just be about home loans - it should be about homeowners. That's why our employees get to know our customer's real needs, through final closing, and beyond.

Industry leading loan options
Simple pre-qualifications and application processes
Loans for everyone, from seasoned investors to first-time buyers
Putting power back into underserved communities

Disclosures

By refinancing an existing loan, the total finance charges may be higher over the life of the loan.

††The rate on your existing mortgage will not change. The Newrez Home Equity Loan program requires borrower to obtain a second mortgage at current market rates. Loan amount based on underwriting guidelines. Minimum 660 credit score. Minimum and maximum loan amounts apply. Program financing only available on properties with one existing mortgage lien and subject to maximum loan-to-value ratio. Not available in all states or territories. Other terms and restrictions apply. Please contact us for more information.

^ This HELOC is an open-end line of credit, available on owner occupied properties, where 75% of the approved full credit limit (minus the origination fees) will be drawn at the time of closing. Additional draws may be available after a 90-day period within the first 3 years not to exceed the available credit limit. Actual rates available to you may vary based on several factors including your credit score and combined loan-to-value. Loan amounts range from $50,000 to $350,000. We may determine home value and resulting equity through independent data sources and automated valuation models. An appraisal may also be required. Only available for eligible borrowers and property types. Not all applicants will be approved, pre-approval is based on data you have provided and certain assumptions that must be verified and subject to underwriting approval. Not available in all states or territories. Contact Newrez for more information.

This is not a commitment to lend. All loan programs are subject to credit, underwriting, and property approval. Programs, rates, terms and conditions are subject to change without notice. Other restrictions apply.