Want to capitalize on the great market, but happy where you are? If you’ve been thinking you might like to refinance, but not sure whether you should, check out our list of top reasons to refinance. Even though the interest rates have risen over the past year, they’re still really low.
Cashout Equity
Got a big expense that you need some cash for, like a wedding, remodel, new car? You can refinance your mortgage and take the equity out to use for these big ticket items.
You may have heard us talk about it before, but we don’t see a reason for you to pay for PMI if you don’t have to. PMI, or private mortgage insurance, is required if you put less than 20% down on your home. But say you’ve owned your home for a few years now, with home values continuing to rise, chances are you have 20%+ equity. Removing PMI could save you a few hundred dollars per month.
It’s not rocket science that lowering your interest rate will likely lower your monthly payment. The savings from the lower interest rate will be translated to your pocket book on a monthly basis. What would you do with the extra money? While refinancing could increase the term of your loan, it might be worth it to you to save money in the immediate future.
Do you have an Adjustable Rate Mortgage (ARM)? With interest rates as low as they are, it might make sense for you to switch to a fixed-rate loan to lock in the low interest rates. Again, interest rates are still low, even though they have increased this past year. Furthermore, they’re likely to keep rising, don’t wait to lock in the lower interest rates.
Shorter loan term
With interest rates as low as they are, it may be appealing to you to have a 15 year fixed-rate loan versus a 30 year. The difference in monthly payments may not be much more and you might find that it works in your budget. There are numbers to punch, but we can help you with those options if that’s something you want to look into.
If you’re not sure whether refinancing makes sense for you, we’d love to hear from you! We’re happy to go over the options with you so you can see if it makes sense for you to refinance.
Milestone Home Mortgage LLC NMLS #2588937. Michael Shotnik NMLS: 218281, CO License: 100017466. Not licensed in Alaska or New York. To check license status of mortgage loan originator, visit D.O.R.A. and NMLS consumer access.
