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Reduce Total Interest Costs
You can reduce your total interest costs in one of three ways:
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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. However, the amount you reduce your interest costs should be
greater than the cost to refinance. Generally, this depends on the
length of time you stay in your home.
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Refinance your loan at a shorter term.
You can also reduce your overall interest costs by refinancing at a shorter
term. Unfortunately, your monthly payment will be higher. If
you’ve been in your home for a while and your income has increased
significantly, you may want to take advantage of this option to reduce your
total interest costs.
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Refinance with a new ARM mortgage?
If you currently have an ARM mortgage, and your rate has adjusted higher,
you could reduce your total interest costs by refinancing with a new ARM
mortgage loan.
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