How do you know if you should refinance?
Why refinance? How do you determine if refinancing is good for you? With rates at all time lows everyone is asking themselves should we refinance? There are many factors to consider in refinancing not just the obvious of lowering your rate and lowering your monthly payment.
What are your goals? Do you want to paydown your mortgage faster? Do you need to lower your monthly expenses? Do you have debt that needs to be paid off or down? How about, would you like to lower your loan terms so you can pay your home off sooner?
These are all questions to ask yourself. I ask this of my clients when they contact me in wanting to refinance. I want to know what their goal is, what they are trying to achieve. This helps me in finding out if refinancing is good for them.
The most common reasons people refinance is to lower their monthly mortgage payment. Just lowering your rate by 1% could save $100 or more a month. Down side is you have to consider are you willing to “start over” your once maybe 20 year is now a 30 year loan. So yes stretching out your loan will lower your payments but will it help you get out of debt sooner?
Another reason to refinance would be a quicker payoff! Lowering your loan term by replacing your 30 year to a 15 year or 20 year, instead of doubling your payments you take advantage of the lower rate and pay a little bit more monthly but you end up paying your mortgage off sooner!
Or how about “Cash Out”, now these are a little trickier these days because yes home values are seeming to rise but they are still not where they used to be so it is rare that someone has 20% or more in their home where they could get “cash out” on a refinance, BUT it is possible! And if so sometimes it is a good option if you are in need of paying off some debt.
Again all of these options and a few more that I didn’t go completely into are all possibilities and definitely worth giving a trusted lender a call and asking.
If you would like to discuss or have any questions please give me a call or shoot me an email! Click here if you would like to get started and complete a secure online loan application.
Summit Mortgage Corporation
303-779-0591 ext. 101