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You are here: Home / Our Tips / The Pros and Cons of Refinancing Your Mortgage

The Pros and Cons of Refinancing Your Mortgage

September 25, 2021 By Ralph Gates

Once you buy a home and get settled in, it is then time to start looking at it as the investment that it truly is. In fact, a home purchase is the most expensive purchase and biggest investment most people make in their entire lives. Savvy homeowners are smart to consider their home as an investment that may need to be tweaked from time to time to reap the rewards and also be best positioned for top money-making ability for you.

Should I Refinance?

If you are a homeowner, you must have certainly heard about the dropping interest rates and have asked yourself, “Should I refinance?” Refinancing is one way to ensure that the equity in your home is always working for you. Is it time for you to consider refinancing your home loan? Mortgage refinance rates are at an all-time low, so now is at least the perfect time to see if you are a good candidate to reap the many rewards that are potentially available for refinancing your home loan.

While a mortgage refinance may not be the perfect solution for everyone, there are some definite perks to refinancing your home loan in the right situation. Here are the pros and cons of mortgage refinance to consider.

Top 5 Reasons People Refinance and the Pros and Cons of Each

Lower Monthly Mortgage Payments

  • Pro – The reduction in the amount of your monthly mortgage payment from refinancing can free up extra money that can be used to achieve other goals you have.
     
  • Con – The home loan is extended for another 30 years when you refinance a mortgage, which means more money will be spent paying for interest.

Lower Interest Paid on Loan

  • Pro – When you secure a lower interest rate on your home mortgage, your monthly payment drops, giving you extra cash for other financial obligations.
     
  • Con – While refinancing may be a great choice for newer home loans, you may not realize much savings if you have had your loan for many years with a nearing payoff date.

Switch to a Fixed Interest Rate Mortgage

  • Pro – Switching to a lower fixed interest rate than you had on your original home loan offers financial consistency with payments remaining the same throughout the life of the mortgage.
     
  • Con – Should home interest rates fall again, you will not be permitted to take advantage of these lower rates without refinancing your mortgage again once you have converted from an adjustable mortgage home loan.

Shorten the Loan Term

  • Pro – Refinancing with shorter loan terms allows you to pay off your home loan more quickly, saving money on interest and preparing you for financial success.
  • Con – Obtaining a shorter loan term may increase your monthly mortgage payment, possibly wrecking your budget in the process.

Cash-Out for Home Equity

  • Pro – Cashing out the equity in your home is a great way to get the needed cash for home upgrades, college tuition, medical bills, or other major life expenses.
     
  • Con – Your home loan term will reset to 30-years and ultimately you will end up paying more interest due to the lack of equity in your home due to the mortgage refinance.

The Mortgage Refinance Experts at Mid-America Mortgage Can Help

Savvy homeowners know that they must weigh all the pros and cons of refinancing a home mortgage in order to make an informed decision about the best option for their unique situation. The mortgage refi experts at Mid-America Mortgage can assist you in learning more about your refinancing options, including any closing costs that may be associated with the mortgage refinance loan. We are here to help ensure you know all of your choices and financial options so that you can successfully reach your financial goals.

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Filed Under: Our Tips

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Mid America Mortgage Services, Inc, NMLS #1142067
200 E Walnut St.
Columbia, MO 65203

Phone: (573) 875-1100

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"One of the main things that I loved about Michelle was she was so organized. She would meet us at any location she needed to, and to be honest she had the absolute lowest interest rate. They were always very transparent with fees so there were no surprises. Michelle was always super easy and we would always run in talk to her even it was for a few minutes. The best thing was the process was very, very smooth."

Chris and Jamie

"When we were 18 and 19 years old no one wanted to help us get started. But Michelle took us under her wing 6 years ago next month. There is a lot of people out there that could of taken advantage of us many of times because we had no idea what was going on. For Michelle to stand beside us and walk us through, and not let us get into something that could get us in a lot of trouble means the world. We thank Michelle and we are extremely blessed to be able to work with her and her team. I have never even thought about talking to another lender and will always be loyal to Mid America Mortgage Services, Inc."

Cody and Morgan

"I have had mortgages since 2004 in Columbia and have gone through a couple of banks, but over the last several years, the last couple of houses have been with Mid America Mortgage Services, Inc. Michelle has told us many times, 'I am not going to put you in a situation I am not comfortable with you being in, regardless of what it means for our company'.

Heidi always has a smile on her face and when you walk through the door, they recognize you and say “Hi”. I definitely recommend anyone who is in the home buying, purchasing, refinancing, upgrading business to go to Mid America Mortgage Services, Inc, ask for Michelle because they are going to be the best person you can work with."

John

"I knew Jeanie Byland for a long time. She made the process so easy. One of the things I probably appreciated the most was that she didn't want to spoil the excitement of closing on a new house by showing up on closing day finding out that we owe a lot more than we thought. They were upfront with that information right from the get-go, and that’s because it’s just like they say, ‘They wouldn’t put you in a loan that they would be comfortable taking themselves.’”

Jamie

"My wife and I have moved around quite a bit with my job so we have been through the process before, but we have never had anybody help us as much as Michelle West Mid America Mortgage Services, Inc did. We needed a loan for a new construction home and they were able to help us out with all of our needs and make us feel comfortable with what we were doing moving forward. They did a good job of walking us through the paperwork to make sure that we were pre-approved for a certain amount."

Jason

"My family owns Tiger Ice Company. My experience with Ralph at Mid America started with Tiger Ice because we needed to expand our facility. When we went in to talk to Ralph at Mid America, he pretty much was straight up with us and told us we needed to go back to the drawing board. We came back with new numbers and a new plan, and we built the facility and everything was fine. Our dream of that would not have been possible at all without Mid America Mortgage Services, Inc and Ralph. They don’t tell you what you want to hear, they tell you the truth and that's what we weren't getting from other banks."

Andy

Michelle, I want to thank you for all of your efforts on the loan. I never knew how much information the needed! I appreciate your personal nature and ease of working together. Thank you for making this happen! :)

Amy

"They really explained the process to us very well and made us feel very comfortable, specifically Jeanie Byland. I have never asked a question that I felt dumb about. They really wanted to educate us and have been fantastic. The interest rates changed one day and they called me to say, ‘Hey we might ought to look into refinancing your loan’. I really felt like they had our best interest at heart."

Steve

Selling our home of 17 years and building a new home was a very emotional time for our family. We were ready for the next adventure in our lives but knew there were numerous steps involved. The search for a mortgage officer was simple, Michelle was our choice. Her guidance and knowledge made the process as easy as possible. When we had questions, she was always there to give us an answer and discuss our options. The employees of Mid America Mortgage Services, Inc like Michelle will keep us returning for our mortgage needs.

Chad and Julee

"I’m a very loyal customer at Mid America Mortgage Services, Inc. I have an addiction to building houses and designing them, and they are always right there with me every step of the way helping me get the best loan product and the best rates whenever I am ready to build. They make sure you don’t get a loan that you can’t afford. The whole process was very smooth. I would recommend Mid America Mortgage Services, Inc to anyone because they are always there to teach you, help you, and make it easy for you every step of the way."

Kate


Phone: (573) 875-1100
200 E Walnut St, Columbia, MO 65203

 

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