There’s a lot of mortgage refinance activity right now, and for good reason. Refinancing can help you meet your financial goals in more ways than you’d think.
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Does it make financial sense to refinance your existing mortgage right now? There has been a significant uptick in refinancing activity over the last 30 to 60 days, and this is due to a number of factors:
To begin with, interest rates have fallen even further. They’re sitting very close to their all-time lows across the country, and many homeowners are looking to take advantage of this by refinancing their current mortgages.
Also, home values in our area have been appreciating quickly. Why does this matter?
If you have an FHA loan on your home or put less than 20% down on it, chances are that you have mortgage insurance. Mortgage insurance is that pesky extra amount of money on your monthly statement that serves no purpose other than to protect the banks because you didn’t have enough equity built up in your property at the time of purchase.
Higher home values mean that refinancing now could not only bring down your interest rate but also could eliminate or reduce your mortgage insurance as well.
Another refinancing option is a rate reduction, in which you would keep your mortgage terms the same. This would be great for anyone who needs improved cash flow for things like paying off extra credit card debt or sending a child to college for example.
While some people are afraid of refinancing their mortgage back into a 30-year loan, what they don’t realize is that these changes can be temporary – until that credit card debt is paid off or the child has graduated college – and those savings can then be put back into the mortgage to reduce it to as short or even shorter than the time remaining prior to the refinance.
You can always put extra money back into your mortgage in order to pay it off quicker.
In addition, homeowners can also take advantage of term reduction. Term reduction means lowering the interest rate on your mortgage and using those savings to pay your mortgage off quicker.
As an example, I just helped a client refinance their mortgage from a 27-year loan into a 20-year loan, and it will only increase their payment by $50 per month; this will save them about $150,000 in interest.
In short, there are a lot of different opportunities for people in many different situations to use a refinance to meet their financial goals. If you have any specific questions on how refinancing can help you meet your goals, give me a call or send me an email. I’d be happy to help you!
To begin with, interest rates have fallen even further. They’re sitting very close to their all-time lows across the country, and many homeowners are looking to take advantage of this by refinancing their current mortgages.
Also, home values in our area have been appreciating quickly. Why does this matter?
If you have an FHA loan on your home or put less than 20% down on it, chances are that you have mortgage insurance. Mortgage insurance is that pesky extra amount of money on your monthly statement that serves no purpose other than to protect the banks because you didn’t have enough equity built up in your property at the time of purchase.
Higher home values mean that refinancing now could not only bring down your interest rate but also could eliminate or reduce your mortgage insurance as well.
Another refinancing option is a rate reduction, in which you would keep your mortgage terms the same. This would be great for anyone who needs improved cash flow for things like paying off extra credit card debt or sending a child to college for example.
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There are a lot of ways to refinance right now, regardless of your situation.
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While some people are afraid of refinancing their mortgage back into a 30-year loan, what they don’t realize is that these changes can be temporary – until that credit card debt is paid off or the child has graduated college – and those savings can then be put back into the mortgage to reduce it to as short or even shorter than the time remaining prior to the refinance.
You can always put extra money back into your mortgage in order to pay it off quicker.
In addition, homeowners can also take advantage of term reduction. Term reduction means lowering the interest rate on your mortgage and using those savings to pay your mortgage off quicker.
As an example, I just helped a client refinance their mortgage from a 27-year loan into a 20-year loan, and it will only increase their payment by $50 per month; this will save them about $150,000 in interest.
In short, there are a lot of different opportunities for people in many different situations to use a refinance to meet their financial goals. If you have any specific questions on how refinancing can help you meet your goals, give me a call or send me an email. I’d be happy to help you!
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