Why Should I Refinance??

If you are considering refinancing your home, there are several factors you should think about before making your decision. These factors include the interest rate on your current mortgage, the current market interest rate, how long you plan to live in your current home, and whether or not you need money for other things (such as home improvement, a new car, or paying off credit cards).


Things to consider before refinancing:
 

1) The Interest Rate You Are Paying
Consider the interest rate you are now paying before refinancing. Compare it against the current interest rate to see how much you would save by mortgage refinancing.

2) The Current Interest Rate
Check the current interest rate. To get the benefits of a lower rate, you may have to pay fees associated with the loan, unless your lender is doing a no fee loan.

3) How Long You Will Live In Your Home
The median length of stay in a home is 8.2 years. However, you may have a better idea of how long you will be in your home. If you do not plan on owning your home for much longer, the lower payments associated with the refinancing may not cover the mortgage refinancing fees. If you plan on staying in your home for a long period of time, refinancing could be an excellent way to reduce your monthly payments. Also, if you are planning on moving into a new home while retaining the old home as a rental property, refinancing is a solid plan. You can lower your monthly mortgage payment and in turn, increase your rental income.

4) Consolidation
If you have several outstanding bills, you may want to consider mortgage refinancing your home and in turn, consolidating and paying off your other debts. If you have equity in your home, you may be able to access that equity through a "cash out" refinance. You could choose to apply that equity to a debt consolidation plan, a new car or home improvements.

If you are considering refinancing, also remember that there are a variety of different mortgages. If you plan on living in your home for a long period of time, you may want to consider the traditional fixed-rate 15- or 30-year loan. Another option is to choose an adjustable rate mortgage and consider refinancing again in a few years. By refinancing, you can choose the perfect mortgage for your needs, which may have changed since you first bought your home.

If you are interested in further discussing whether refinancing your home is right for you, please contact me at: