Why Should I Refinance?
With rates on the rise you may be asking yourself, “Why should I refinance?” There are a few economical reasons one may find themselves benefiting from refinancing, even in a rising interest rate environment. Before we go down that rabbit hole, let’s highlight that every scenario has varying goals, outcomes and benefits. A few reasons refinancing might be right for you are outlined below: Consolidating Debt: Many individuals and families find themselves carrying higher balances on credit cards, installment loans and other varying degrees of consumer debt (i.e. personal loans, student loans, auto, etc.). Often times, consolidating these obligations can lower your monthly payment significantly. The extra savings and tax benefits make the decision to pay off debt very cost effective. Imagine refinancing, consolidating 5-8 bills into one payment and saving a couple hundred dollars every month! Home Improvements: Often times, families want to fix and/or update something with regards to their home. This can include things like a larger deck, outdoor fire pit, new windows, updating the kitchen or a bathroom. Whatever the reason, refinancing and utilizing your equity may be the right solution for you. Perhaps you don’t have the money saved up, or don’t want to liquidate your savings or 401K. In those instances, leveraging your homes equity may be beneficial to tackle some of those overdue home improvement projects. Reducing the Term of Your Mortgage: You may be interested in how to pay off your existing mortgage faster. In order to facilitate this, you may refinance and reduce your existing 30 year mortgage to either a 20, 15 or even a 10 year term. Refinancing and shortening your mortgage term can save you thousands in interest payments. As with anything else involving lending, it’s important that you reach out to a qualified mortgage banker to walk you through the pros and cons of refinancing. Doing so ensures you know the benefits but also the costs associated with achieving the desired goal. Even in a rising interest rate environment, refinancing can bring financial stability to you and your family in numerous ways.