Modify Loan Terms (Rate, Years and/or Program Type)
You can reduce your total interest costs in one of three ways:
-
Refinance your loan at a lower interest rate.
If you are paying a higher interest rate on your loan compared to current market
rates, you could reduce your total interest costs by refinancing at a lower
rate. You will need to compare the amount of your monthly savings versus
the costs associated with refinancing. This calculation will illustrate
how long it will take to recoup your refinance costs (break even).
Generally, the decision to refinance depends on the length of time you
plan to stay in your home.
Calculate
your cost savings with a new loan at a lower rate.
-
Refinance your loan at a shorter term.
You can also reduce your overall interest costs by refinancing with a
shorter term; however, your monthly payment will be higher. If
you’ve been in your home for a while or your income has increased
significantly, you may want to take advantage of this option to reduce your
total interest costs.
Calculate
your cost savings with a new loan at a shorter term.
-
Refinance with a new ARM mortgage?
If you currently have an ARM (adjustable rate mortgage) and your rate has
adjusted higher, you could reduce your total interest costs by refinancing with
a new ARM mortgage with a lower interest rate.
Calculate
your cost savings with a new ARM loan.
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