5 reasons you may want to refinance this year
Mortgage rates are near historical lows, but could climb. The Federal Reserve raised the Prime Rate this year and may raise it again this month. Mortgage rates may eventually follow, even though they’re not directly tied to the Prime. If your mortgage rate is more than 1% above current rates, it could make sense to refinance soon.
Home prices have risen. In many areas, prices are up and so is owner equity. If your home’s value has risen, you may be able to:
refinance with better terms;
drop private mortgage insurance when your equity reaches 20% of your home’s value;
put money in your pocket with a cash-out refinance.
You may look better as a borrower. You might get better loan terms if your earnings are up, or if you use the money to pay off debts, which may raise your credit score.
You’ve decided to stay awhile. Stay long enough for your lower monthly payments to recoup refinancing costs.
You want to shorten the term of your mortgage. Refinancing may allow you to switch from a 30-year to a 15-year loan at a substantially lower interest rate. Your monthly payment may increase, but you’ll save money over time.
For more on refinancing, or financing a home purchase, please text, email or call us any time... Have a great day!