Is Now A Good Time To Refinance? 6 Reasons To Consider

In this post, we are going to share our 6 reasons to consider why refinance now may be a good idead. 

Many homeowners are wondering if now is a good time to refinance because of low-interest rates. When done correctly, refinancing can save you a lot of money in the long run. It’s also vital to think about the disadvantages. Here are some of the reasons you might want to refinance, as well as some considerations to keep in mind.

You may desire to refinance for the following reasons:

1. To reduce the amount of money you pay each month. If interest rates are lower today than when you bought your house, refinancing to a lower rate will cut your monthly payment, freeing up cash for other expenses, your children’s education, or retirement savings.
2. To get your mortgage paid off sooner. Applying the money you save from a smaller mortgage payment to your principle, which will help you pay off your loan faster, is a wonderful way to use it.
3. To benefit from a higher credit score. If your credit score has improved dramatically since you purchased your house, refinancing may provide you with a better loan.
4. To reduce total interest costs. Refinancing appeals to some people because they want to pay less interest in the long run. Reduced interest rates and/or loan terms will save you money in the long run.
5. To change the type of loan. You may wish to switch to a fixed-rate mortgage if your adjustable-rate mortgage has been increasing or is nearing the end of its fixed duration.

If you have enough cash on hand to make greater monthly payments, switching to a 15-year mortgage may make sense so you can pay it off sooner.

6. To pay off debt or withdraw cash. If you have enough equity in your house, you may be able to borrow against it to pay off higher-interest debt, make home upgrades, or cover obligations such as your children’s education or medical bills.

{Related – Home Equity Learn the Secrest of Wealth}

When taking out a loan against your property, be cautious. If the money you borrow is used to increase your debt rather than to pay it off, you may end up losing your house.

Remember to factor in the closing costs associated with refinancing. Just as when you bought your house, your new loan will come with fees, so remember to factor in the closing charges while doing the calculations.

Also, be wary about extending the length of your loan. If you refinance with a 30-year mortgage after being in your existing mortgage for 10-15 years or more, you’ll wind up spending a lot more in interest and extending your payments for many more years.

Dave Ramsey’s View on Refinancing

Of course, a mortgage lender is the best person to ask if you have any queries about financing. I’m happy to direct you to someone else if you need further information.

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