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Five Reasons
to Refinance
Five Reasons
to Refinance Your Mortgage
There is an old adage that says if you can improve
your interest rate by at least two percentage points,
then it is a good time to refinance. While that
may work as a general rule of thumb, the truth is
there are other reasons to refinance:
1. Lower your interest rate
Securing a lower interest rate is one of the top
reasons for refinancing. This can make a big difference
in your monthly out-of-pocket costs for housing
and save money on financing fees.
2. Build equity faster
If you are in a position to make higher monthly
payments due to an increase in salary or other good
fortune, you may want to switch from a 30-year loan
program into a 15 or 20-year loan structure. This
enables you to build equity faster and save a tremendous
amount of money on financing fees.
3. Change your loan program
Many homeowners who start with Adjustable Rate Mortgages
desire to move to the stability of a Fixed Rate
mortgage later on down the road. As interest rates
fluctuate, making original deals less attractive,
people will change their loan programs in order
to capitalize on the best rates available.
We can provide you with loan comparison charts to
find out what you can save with various loan programs.
4. Credit score has improved
If your credit score has improved as a result of
making your mortgage payments on time and in full,
you may be in a position to take advantage of your
improved credit standing.
We can review your current credit score, the terms
of your existing mortgage, and review options for
other loan programs that could not only reduce your
monthly payment, but also save on interest fees
paid over the life of the loan.
5. Use the equity you have established
A cash-out refinance allows you to tap into the
equity you have built up in your home. You may want
to pay off revolving credit card accounts, send
a child to college, or use the money for home improvements
or personal expenses.
Regardless of your reasons for wanting to refinance,
my team and I are interested in helping you make
a decision that works best for you.
We will begin by reviewing the terms of your existing
mortgage program. It will be important for us to
know the purpose of the refinance and how long you
plan to stay in the home. This helps us to determine
whether or not it is beneficial for you to pay points
up front to secure a lower interest rate on your
new financing.
Throughout the process, we will present you with
spreadsheets outlining various loan programs, and
continue to monitor rates in order to inform you
of the best time to refinance.
Contact Best No Doc Loans at 888-275-6788 or
info@bestnodocloans.com
for an analysis of your unique situation and to
see if refinancing your mortgage will benefit you.
You may consider refinancing if you have a variable
rate second mortgage which you would like to roll
together with your first mortgage, for one lower
monthly payment which is fixed.
Do you have children near college age? Tuition
can defiantly strain a families budget, so many
people take cash out of their home equity to help
with these new costs. Other people take cash out
for investment, or home improvement. Refinancing
is one way to help with today's high cost of living.
Another reason might be if someone has just added
huge escrow debt due to their backed tax that the
lender paid on behalf of the borrower. Since the
lender wants to get this money back within 12 months
period, the borrower's monthly payment gets increased
substantially. Refinancing will usually spread the
borrowed escrow money over 360 month payments and
thus level out your monthly obligation.
Some people will refinance if their financial
situation has worsened or changed and they need
to try and lower their payment(s) by increasing
their loan term. Sometimes a borrower may be on
a term that is less than 30 years and by increasing
their loan term to 30, or even 40 years the borrower
may be able to save a considerable amount of money
and lower their monthly mortgage payments. This
is one of the many reasons why some people refinance.
It's common for clients of ours to refinance
in order to cover the home improvements they have
planned on the home. While it will add on to the
balance of your mortgage, it's also likely that
the improvements made to the home will increase
the value of your home. If by adding the improvements
to your home you can add more value to the property
than the actual cost of the improvements, the addition
becomes free and you actually make money in adding
the improvements.
Traditionally in days past, the primary reason
to refinance was to lower the interest rate. Nowadays,
with the huge variety of different loan programs
that each offer some specific financial advantage
to a homeowner depending on his particular situation,
lowering the rate is no longer the primary reason
for a homeowner to refinance.
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