Many people refinance their mortgages for different reasons depending on where they are in life. We have taken a look at the top four reasons that people decide refinancing is right for them.
Here are the top reasons to do so and how it can help you financially:
- Get a lower payment. If you can lower your rate, you can probably get a lower payment. One thing to consider is will you be adding to the balance you owe and will you be extending the term? If you are having trouble making your payment then increasing your balance and/or extending your term might be an ok option. Otherwise consider a lower-cost loan (higher rate) and consider refinancing for the same # of years you owe now. Lenders can do odd-terms (27 yrs or 18 yrs for example).
- Shorten term. Many people choose to go with a 15 year or 10 year loan so they can pay their loan off earlier. This is a great strategy if you can afford the higher payment that comes with a shorter term.
- Cash-out. The top reasons people take out bigger loans to get cash are to pay off debt, do home improvements, make a major purchase (car for example) and to pay college tuition. The lender will have more restrictive policies on your maximum loan amount when you are taking cash out. If your goal is do home improvements then there are several options that revolve around renovation.
- Get rid of mortgage insurance. People who bought with a low down payment may be paying monthly mortgage insurance and refinancing may enable them to get rid of the monthly fee. If your house has appreciated, you may be able to get rid of the mortgage insurance without refinancing. Click this link to read more about removing mortgage insurance.
Whatever your reason for refinancing, get a couple of opinions on your options. There’s a lot to consider when refinancing. Make an informed decision and contact us today and see how we can help you!
Call us for a free consultation or apply online to jumpstart the conversation.