Take the guesswork out of your monthly rate.
A fixed-rate loan is a common refinance option for homeowners seeking to part ways with the unpredictability of an adjustable-rate mortgage (ARM).
With a fixed-rate refinance loan, your interest rate stays the same throughout the life of the loan. The loan payment also doesn’t change.
If you plan to stay in your home for a long time, or you just like the comfort of knowing that your rate won’t change, a fixed-rate loan might be the way to refinance.
While there are potential advantages of refinancing a mortgage to a fixed-rate loan, keep in mind that refinancing isn't for everyone, as individual situations differ.
Advantages:
- Predictable. You know exactly how much interest you’ll pay over the life of the loan.
- Peace of mind. The rate won’t change, and neither will your monthly payments.
- Spend less over time. Refinancing into a lower interest rate fixed-rate loan reduces the amount of interest you pay over time.
- Reducing the loan term also helps save on interest over the life of the loan.
Disadvantages:
- Fixed rates are typically higher than initial rates for adjustable-rate mortgages (ARMs).
- If rates drop below what you’re paying on your loan, you won’t be able to take advantage of the lower rate unless you refinance again.
- If closing costs are high with a refinance, that will impact potential savings.
- Refinancing to a lower loan term could result in your monthly payments increasing because your time to pay off the loan is less.
To find the right refinance loan option for your situation, talk to an Evergreen Home Loans loan officer.
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