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Six Reasons to Refinance Your Mortgage

Yes, even at today’s rates!
 
You might be surprised to learn that refinancing your mortgage could still be a wise financial move, even with higher interest rates than a few years ago. For many homeowners, refinancing can offer valuable benefits — from saving money to meeting new financial goals.
 
At First Western Mortgage, we’re here to help you make the best decision for your unique situation. Here are six smart reasons why refinancing your mortgage may make sense for you today.
 

Reasons to Refinance Your Mortgage Today

 

1. Lock In a Fixed Rate Before Your Adjustable-Rate Mortgage Resets

If you currently have an adjustable-rate mortgage (ARM) and your rate is set to increase soon, refinancing into a fixed-rate mortgage could save you money and provide protection against future rate hikes. Even with today’s rates, refinancing could stabilize your monthly payments and offer peace of mind for years to come.

 

2. Your Credit Score Has Improved

If your credit score has gone up since you first secured your mortgage, you may qualify for a lower interest rate through refinancing. Even a modest drop in your rate can lead to significant savings over the life of your loan.

 

3. Tap Into Your Home Equity

If your home has gained value, refinancing can allow you to cash out your equity for important financial needs. Homeowners often use a cash-out refinance to:

  • Pay off high-interest credit card debt

  • Fund home improvements or renovations

  • Cover college tuition costs without relying on student loans

  • Invest in additional property or other financial opportunities

Using your home equity wisely can help you strengthen your financial future.

 

4. Shorten Your Loan Term and Pay Less Interest

Refinancing to a 15-year mortgage instead of a 30-year mortgage can help you build equity faster and pay significantly less in interest over time. While your monthly payment may be slightly higher, today's 15-year mortgage rates are often lower than 30-year rates, making this an attractive option for many borrowers.

 

5. Eliminate FHA Mortgage Insurance

If you have an FHA loan, you may be paying mortgage insurance premiums (MIP) of $800 to $1,050 per year for every $100,000 borrowed. These premiums can add up quickly — and they last for the life of the loan. Refinancing into a conventional mortgage is often the best way to eliminate FHA mortgage insurance and lower your overall monthly payment.

 

6. Add or Remove a Borrower

Life changes, and sometimes you need to add or remove someone from your mortgage. Whether due to divorce, marriage, or the passing of a co-borrower, refinancing is typically required to change the loan terms. A cash-out refinance or a rate-and-term refinance may be ideal, depending on your specific situation.

 

Ready to Explore Your Refinancing Options?

At First Western Mortgage, our experienced mortgage lenders in Arkansas are ready to help you evaluate your refinancing options and create a plan tailored to your goals. Whether you want to lower your payments, eliminate mortgage insurance, or tap into your home’s equity, we’ll guide you every step of the way.

Call us today at 479-845-0972 or visit us in person to discuss your refinancing needs.

Equal Housing Lender: NMLS#498427