Are you considering refinancing your mortgage? Here are a few things you’ll need to take into account first.
We’ve been getting a bunch of questions recently about refinancing and whether it’s a smart move in our current market. Here are a few things you should think about if you’re experiencing the same dilemma.
For starters, if you’re going to consolidate some type of high-interest debt, refinancing makes a lot of sense because you can lock that debt into a much lower interest rate. That can save you a ton of money.
If you are currently in an adjustable-rate mortgage and it’s about to expire over the next year or two, it might be a good idea to refinance to a fixed rate before that adjustable rate skyrockets.
Another thing you’ll need to think about is the terms of your loan. Let’s say that you’ve been paying your mortgage down for the next seven years and you go to refinance. Typically, if you go to refinance for another 30 years, you’re basically extending the life that you’re paying for your loan by another seven years. For some people, that is advantageous and for others it’s not. You have to think about where you are in your life.
“Now is a great time to refinance, pull out your equity, and make another investment.”
For example, we had a client who needed more cash flow from their property because they had a child going to college. They decided to extend their mortgage out so they could keep more of their cash and use those funds for college. Don’t just think about terms on one side. Think about them in the totality of where your life is and where you should have your cash.
If you’re a real estate investor, right now is a great time for you to take out a home equity line of credit, refinance, and pull out money to buy another investment property.
These are just a few of the things you’ll need to think about when refinancing. If you have any questions for me about the process or what you should do in your situation, don’t hesitate to give me a call or send me an email. If you have a rate over 4.5%, we should be talking. I hope to hear from you soon.
