There seems to be a lot of talk about refinancing today, and I wanted to take some time to go over some of the many reasons of why someone would refinance their current mortgage. I understand that change can be scary and it’s easier to just not do anything at all. However you will see below that you may actually be hurting your financial situation if you will not consider refinancing.
1: MONTHLY SAVINGS
This is for most people the main reason they look at refinancing; reducing their monthly mortgage payment. Today, interest rates are still near historic lows, and a reduction in mortgage rate will lower the monthly payment. Thankfully, there are many programs that allow for a homeowner to access these low rates. HARP, FHA Streamline, VA IRRL are a few programs that allow a homeowner to refinance regardless of what they currently owe and without an appraisal. There are many other options that a licensed loan officer could discuss with you and go over your options.
2: REDUCING TERM
With rates still being near historic lows, many homeowners have taken the opportunity to reduce their mortgage terms by refinancing from a 30 year term to a 20 or 15 year term. With the reduction in rates, many of done so without increasing their monthly payments and in some cases even reducing their monthly payment. Reducing your mortgage term, saves thousands of dollars and is a something to consider if the numbers make sense.
3: CASH OUT- ACCESS EQUITY
For those who have been in their homes for awhile, in most cases they have gained equity that is now available for them to access. There are many programs today that allow homeowners to access the equity in their homes for a numbers of reasons: paying off credit card and loan debt, college expenses, home improvements, and the list goes on. Some homeowners save hundreds of dollars every month by consolidating their debts through a refinance. A licensed loan officer can go over what options you have and see if a cash out refinance could help you.
These are just a few of the many reasons a homeowner would refinance. With interest rates still low, and many programs being available for all credit types, now is a great time to look into your options. I encourage you to reach out to a licensed loan officer who can discuss all your options with you and see if refinancing makes sense for your situation.