A mortgage refinance can create numerous opportunities for a homeowner. Traditionally, homeowners choose to refinance to secure a lower interest rate or change the terms of the loan. There are other advantages to refinancing, as well, depending on your situation.
Are you ready for a mortgage refinance? Do you know someone else who might be?
Review our personalized refinance checklist below and if you get a “yes” to one or more of these questions, it might be the right time:
- Can you lower your interest rate? Mortgage interest rates can fluctuate based on the borrowers financial profile and greater economic influencers. If a rate refinance can get you an interest rate at least 1 percentage point lower than your current interest rate, you could save hundreds or even thousands of dollars on mortgage interest.
- Has your credit score improved? If you have made your mortgage payments on time, lowered your debt-to-income ratio, and used other credit accounts responsibly, chances are your credit score has improved. A higher credit score can help you refinance into a better loan.
- Can you shorten your loan terms? You may have financed your original home purchase with a 30-year fixed-rate mortgage, but after a few years you find you might benefit from a 15-year fixed-rate mortgage. Shorter term mortgages tend to have lower interest rates, and a term refinance can help you take advantage of those lower rates.
- Do you want to convert from adjustable-rate to fixed-rate or vice versa? The advantages of an adjustable-rate and fixed-rate mortgage vary from homeowner to homeowner. Whether your original mortgage was an adjustable-rate or a fixed-rate, the current interest rate environment may be better suited for the other type.
- Do you want to tap into home equity? As home values continue to rise, many homeowners are considering withdrawing home equity to use for home improvements, to pay down debts, or to meet other financial goals. If your home has appreciated in value since its purchase, and you have at least 20% equity in your home, a cash-out refinance or refinance into a Home Equity Line of Credit may be a great option for you.
If you answered “yes” to one or more of the questions above, or you know someone that would, we should talk! Before pursuing a mortgage refinance, it is best to have me review the specific situation to determine whether or not it’s the right move.
The flip side of low interest rates – means the cost to borrow money is down – making the cost of home ownership more reasonable. A buyer can afford MORE HOUSE when interest rates are down. The moment rates rise – a buyer will see an adjusted loan amount from their bank – meaning they can afford less house. Interest rates change daily – the only way to lock into the low rate is to get into contract on a house and buy it.
With so many facets to cover, The Caton Team prefers to meet our clients face to face so we can determine what is the best course of action for you and your loved ones. Contact us anytime for a free Real Estate consolation.
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