Reasons to RefinancePosted on Mar 11, 2020
Home loan interest rates tend to be unpredictable, especially in today's world! As rates consistently fluctuate, it can feel frustrating and nearly impossible for homeowners who want to refinance their mortgage to lower rates. A low rate today could be a higher rate tomorrow. The ultimate question ends up being, when is the best time to refinance? The answer depends on your unique situation and reasons for refinancing. Although receiving a lower interest rate is the main reason people refinance, there are others too! Listed below are three major reasons to refinance your mortgage.
To Receive a Lower Interest Rate and Reduce Your Monthly Payment
This is the most obvious reason to refinance. The lower the interest rate, the less money you will spend monthly, and the less you will pay on interest for the lifetime of the loan. Most people tend to solely focus on the rates and fees without realizing that, on top of doing this, structuring a loan properly can save them far more. It’s difficult to clearly define what simply getting the “best rate” means. This definition differs for everyone. Our recommendation would be to talk with your local Mortgage expert.
Give our team a call today to discuss how you can do this with your unique financial situation!
Make Use of Your Equity
Refinancing may mean tapping into some of the equity you’ve gained over the years. As previously stated, home values are known to fluctuate and be unpredictable overtime, so it may be a great opportunity to get some of that cash out so you can use it now. It's a great opportunity that makes other expenses more obtainable especially when the interest rates are low! If you are able to do this while home values are high and your home is owner-occupied, the cash can be used elsewhere like for a new kitchen, to refresh your landscaping, or other home improvements!
To Consolidate Other Debt
Let’s face it, most people have debt that is not mortgage-related. Another typical reason to refinance is to consolidate the non-mortgage related debt. Often student loans, credit cards, and car loans have a much higher interest than you can get with residential home mortgages. So you can do a cash-out refinance mortgage and use that newly available cash to pay down debt elsewhere.
Refinancing your mortgage can go past simply wanting or needing a lower interest rate and monthly payment. There are plenty of other factors to consider in determining if refinancing is right for you. There’s never a guarantee you will qualify for a mortgage in the future. You could also run into a financial hardship you weren’t expecting. Regardless of the reasoning, it’s best to stay educated on your options. Contact one of our professionals today if you need guidance deciding what will be best in your current or future mortgage situation!