Reasons a refinance might benefit you!
Lower your rate and/or payment. This is one of the most common reasons that homeowners refinance their mortgages. If your current interest rate is higher than what is currently available in the market, it is probably a good idea to see how much you could save by refinancing. There are no-cost and low-cost options that could save you money with little to no investment. Our team can help you review options.
Reduce your term. This means reduce the time it takes to pay the mortgage off. This puts money back in your pocket.
Convert your adjustable rate into a fixed rate. Adjustable-rate mortgages (ARM) are a great way to receive a smaller, initial payment, especially if you are a first-time homebuyer or you don’t plan to stay in the home too long. If down the road you decide to stay in the home longer, you may want to consider refinancing that into a long-term fixed-rate loan. Doing so will give you peace of mind, knowing that your rate and payment will not change for a set period of time.
Convert your interest-only loan into a fully amortized loan. Like ARMs, interest-only mortgage loans are a great way to minimize payments at the beginning; however, because you are not paying any principal, your loan balance does not decrease. If you plan to keep your home long-term, a fully amortized loan is the best option. Often, you can refinance your interest-only mortgage loan to a 30 year fixed mortgage loan while keeping your payments about the same.
Remove mortgage insurance. If you purchased a home with less than 20% down, chances are you’re paying private mortgage insurance (PMI). Refinancing will help you eliminate the extra expense if you’ve paid down your balance and/or have seen an increase in your home’s value to a point where you have at least 20% equity in, or a loan-to-value (LTV) of 80% or less.
Convert your 30 YR loan to a shorter-term loan. Sometimes plans change and the home that you thought you were going to have for a while turns from a permanent situation into a temporary one. If you are planning to sell sooner than you thought and no longer need a long-term rate, then you may consider converting your 30 YR fixed to either an ARM or a 3/1, 5/1, or 7/1 loan program, which often have lower rates and payments.
Cash-out your equity to consolidate debt. Leveraging your equity is one of the smartest ways you can make your money work for you. Use the cash to pay off higher interest, non-tax-deductible credit cards, student loans, or medical bills. By consolidating your debts, you can enjoy the benefit of having only one payment each month, and in most cases, your overall monthly expenses decrease.
Cash-out for home improvements. What better way to use your hard-earned equity than to invest it back into the home with repairs or home improvements? Whether you would like to fix your leaky roof or update your kitchen, you can tap into your equity and have a tax deductible* way to tackle your DIY projects.
*consult with your tax advisor
Cash-out to purchase an investment property. With interest rates at the lowest they’ve been in years, if you’ve been thinking about buying a vacation home, rental property or investment property now may be a great time to take action on your wealth goals. Tap into the equity and use the cash as your next step in growing your wealth.