Are you aware of the benefits of refinancing your mortgage? Refinancing your mortgage could potentially help you build equity faster, save on interest, or even make use of the equity you already have. If you are evaluating whether or not refinancing is right for you, there are three important questions you should ask yourself.
What goal do you want to achieve?
First things first, write down what you want to accomplish by refinancing and how it will benefit you. Typically, homeowners refinance to either shorten the term of their mortgage so they can pay it off sooner, like in a Mortgage Eliminator Loan, or they take advantage of a lower interest rate.
How long will you be in your house?
If you are considering refinancing your mortgage be aware of the expenses involved like closing costs and appraisal fees, to name a few. Depending on the loan, it may take a few years to recoup the savings. If you’re thinking of moving soon, you may want to hold off.
What are the rates?
Be sure to do your homework. Typically, most homeowners look to refinance when they can cut around two percentage points off their interest rate. However, there are also plenty of financial advantages with refinancing if the rate savings are less than two percent, such as reducing the term of the loan in addition to rate savings and rolling debts into a consolidation refinance loan to reduce overall payments. An Allegacy Mortgage Loan Specialist can help you make the best mortgage choice for your situation.
Keep in mind that if you’re refinancing from a 30-year fixed-rate mortgage to a 15-year loan, your monthly payments may go up. The upside is, you’ll be saving money by paying it off earlier.
It’s important to think about what’s best for you. At Allegacy, we offer a variety of mortgage refinancing solutions and knowledgeable specialists to help you make the best decision for you. Talk with a mortgage specialist today to discuss if refinancing your mortgage is a smart financial choice.