Mortgage refinancing is a great way to save money on your home loan. By refinancing, you can take advantage of lower interest rates and better terms, which can help you save money over the life of your loan. But when it comes to refinancing, there are two main options: twisting and sticking. Understanding the differences between these two strategies can help you decide which one is best for you.
Twisting involves taking out a new loan with a lower interest rate and then using the proceeds to pay off your existing loan. This strategy can save you money in the short-term by reducing your monthly payments. However, it also means that you’ll be paying more in interest over the life of the loan.
Sticking, on the other hand, involves keeping your existing loan and simply adjusting the terms. This could mean extending the length of the loan or switching to a different type of loan, such as an adjustable-rate mortgage. This strategy can save you money in the long-term by reducing the amount of interest you pay over the life of the loan. However, it may also mean higher monthly payments in the short-term.
When deciding which strategy is best for you, it’s important to consider your financial goals and timeline. If you’re looking to save money in the short-term, twisting may be the best option for you. But if you’re looking to save money in the long-term, sticking may be the better choice.
No matter which strategy you choose, it’s important to do your research and shop around for the best deal. Comparing different lenders and their rates can help you find the best option for your needs. It’s also important to consider any fees associated with refinancing, as these can add up quickly and eat into your savings.
Mortgage refinancing can be a great way to save money on your home loan. By understanding the differences between twisting and sticking, you can make an informed decision about which strategy is best for you. With a little research and comparison shopping, you can find a great deal that helps you save money over the life of your loan.