If you are currently paying off a mortgage in Tennessee, you may be able to lower the amount you have to pay each month or reduce the amount of time that it takes to pay off your loan by refinancing. When you refinance your loan, you have an opportunity to choose a different term length. You also may qualify for a lower interest rate, depending on your credit score, the amount of equity you have in your home, and other factors.
Before you begin the process of refinancing, sit down and decide what your ultimate goals are. Chances are, you probably want to lower your monthly payments. However, you should avoid the temptation to refinance with another 30-year loan. Although this can dramatically lower your monthly payments, it can also wind up costing you a lot of extra money in interest over the life of the loan.
A better option is to choose a shorter loan term. For instance, you still may be able to lower your payments by choosing to refinance with a 15-year loan rather than a 30-year loan. Although the reduction in your payments may not be quite as much, you will wind up saving a lot of money over the years as you pay off the loan.
As long as you have stayed on track with your credit, you should also be able to qualify for a lower interest rate than you thought when you originally purchased your home. The reduction in interest can further lower your payments, making the idea of switching to a 15-year loan even more doable. Depending on how low you can get the interest rate, you may even be able to choose a loan with a shorter term than that.
Ultimately, your objective should be to get a lower interest rate and to shorten the term of your loan. Try to think of the reduction in your monthly payments as an added bonus rather than as the ultimate goal.
Once you know what you are looking for, it is simply a matter of shopping around to find the best mortgage rate. By comparing offers from several different lenders, you should be able to find a loan that works for your needs.
The process of refinancing a home loan in Tennessee is relatively easy. You just need to make sure that you choose a loan that will help you pay off your home as quickly as possible while at the same time minimizing the amount of money that you have to pay in interest.