There are many potential benefits to refinancing your home. If timed right, a home refi can be used to:
-Reduce your monthly payment with a lower interest rate
-Shorten the term of your current mortgage
-Convert the loan from an adjustable rate to a fixed rate
-Convert home equity into cash to finance a large purchase or project
Low interest rates in the housing market, like the ones currently in place and projected through the remainder of 2019, can potentially signal that the time is right to leverage your home equity and secure your own better rate through a home refi. But as with any major financial decision, you should weigh the pros and cons to find out if a refi is right for you.
What Does it Mean to Refinance?
When you refinance your home, you are securing a new mortgage loan to replace the original one, which is paid off in the process.
When Does it Make Sense to Refi?
One of the key signs to look for is a drop in mortgage interest rates, since lower rates can translate to lower monthly payments. Additionally, if you’ve found that your home value has increased, you’ve gained some equity, and/or your credit score has significantly improved since you originally purchased your home, your current mortgage loan may no longer accurately reflect your financial position as a homeowner or investor. If your original loan is no longer measuring up, it may be time to explore the potential advantages of refinancing! It is also important to keep in mind that since no two loans are alike, there may advantages based on your own unique situation.
Are There Risks to a Refi?
Like your original mortgage, the closing process for your refi has its own expenses, including application and origination fees, appraisal, taxes, and other closing costs; these expenses should be factored in against your projected savings when you are making your decision. A home refi can be a worthwhile investment, but it could also end up costing you money if the time isn’t right or you don’t have all of the needed resources to make an informed decision.
So are you Refi Ready?
It’s more than just a mortgage. Your home or investment is a significant part of your financial life and should meet your needs, both present and in the future. And while it is important to examine online resources and refi calculators as part of the education process, it can also be beneficial to receive a customized mortgage checkup from a trusted lender. Not all lenders are created equal, so it is important to find a relationship that puts you first and walks you through your unique financial situation toward your goals.
At Beach Community Mortgage, we focus on building long-term relationships with our clients, which can only happen by tailoring a plan to your specific needs and using all of our resources and expertise to make sure you feel confident and satisfied in the financial decisions you make. We understand that lending is about more than one-size-fits all questionnaires; contact one of our expert loan officers today for your customized mortgage checkup and see the difference at Beach Community Mortgage!