3 Reasons You Might Consider Refinancing Your Mortgage in Early 2018

3 Reasons You Might Consider Refinancing Your Mortgage in Early 2018If you are a homeowner who has had their mortgage for a few years, you may be starting to wonder about refinancing. In essence, this is the process of retiring your current mortgage and taking out a new one because the terms are more favorable to you. Below we will share three reasons why you might want to look at refinancing your mortgage this year. Let’s get started.

Can You Use Some Extra Cash?

Ask yourself: if you had some extra money on hand, how would you use it? Many homeowners refinance to pull out some of the equity value that they have built up in their home over time. You might use this cash for a major renovation, or to upgrade your furnishings, or even just for a nice vacation.

Of course, you should keep in mind that you are borrowing a brand-new mortgage loan that will replace your old one. You will still need to pay attention to your credit score, monthly debt load and other personal finances.

Can You Get A Better Interest Rate?

Moving to a mortgage product with a better interest rate is another reason that homeowners refinance. Mortgage interest rates tend to fluctuate over time and it is possible that you may be able to get a lower rate, which in turn lowers your monthly payments. If your credit score has improved significantly since you first borrowed your mortgage, you may find that you have access to favorable interest rates as well.

Would You Prefer A Lower Monthly Payment?

Finally, an efficient use of refinancing is to reduce the amount you have to pay for your mortgage each month. For example, if you owe $60,000 and you have five years remaining, that ends up being about $1,000 per month. However, depending on your circumstances it may be possible to extend this out to 8 or 10 years, which means that you will pay a lower monthly payment for a longer time period.

The above are just a few of the many good reasons that you might consider refinancing your mortgage sometime in 2018. To learn more about the benefits of refinancing, or to get the process started, give us a call today. Our friendly team of professional mortgage advisors is ready to share our experience and help you get the most out of your refinancing.

Renovating in 2018? Cash-out Mortgage Refinancing Might Be the Best Way to Fund It

Renovating in 2018? Cash-out Mortgage Refinancing Might Be the Best Way to Fund ItIf you are a homeowner thinking about a significant home renovation in 2018, you have probably already considered your budget. As with any large project, you need to have the ability to pay the expected costs plus have a little bit extra set aside, just in case. The great news is that if you are a homeowner with a mortgage, you may qualify for cash-out refinancing, which can be a helpful way to leverage some of your home equity to cover renovation costs.

In today’s blog post we’ll explore the topic of cash-out refinancing and how this unique financial product can help to solve your budget woes.

What is Cash-Out Refinancing?

If you have never heard of it before, you are probably wondering exactly how cash-out refinancing works. In short, you refinance your existing mortgage into a new one while keeping the difference in cash. For example, if you have $100,000 left on your mortgage, but your home is worth $200,000, you might decide to refinance to $150,000. You will then be left with $50,000 in cash, which you can pull out to cover the cost of renovations or for other purposes.

Note that this is different from other forms of mortgage refinancing, which may or may not increase your total balance.

Some Of The Major Pros Of Cash-Out Refinancing

As you might imagine, there are significant pros to cash-out refinancing. If you decide to use the funds for renovation purposes, you are essentially using your mortgage to increase the value of your home. That is, of course, assuming you complete renovations which boost your home’s value!

Cash-out refinancing can also provide better or more stable interest rates than a loan or a home equity line of credit. This depends on a variety of circumstances, so be sure to check with your lender.

A Few Other Considerations To Keep In Mind

As with any financial product, there are some considerations to keep in mind. You may be extending the length of your mortgage, or refinancing to a different interest rate. You also can’t just walk in and sign for cash-out refinancing. There will be a process similar to the one that you went through when you got your current mortgage.

As you can see, cash-out refinancing is an excellent option for homeowners looking to use some of their home equity to finance other expenses. To learn more about this type of refinancing or to explore other mortgage options, contact us today. 

You Ask, We Answer: How Do I Know If It’s a Good Idea to Refinance My Mortgage?

You Ask, We Answer: How Do I Know If It's a Good Idea to Refinance My Mortgage?Are you interested in paying less per month on your mortgage? Or perhaps you would prefer if your mortgage was paid off a couple of months – or years – faster? If you are a homeowner with a mortgage, one option that is open to you is refinancing. In today’s post, we will explore the topic of mortgage refinancing and how to know if it is a good idea.

How Does Refinancing Work?

In short, refinancing is a process in which pay off your existing mortgage and borrow a new mortgage under a different set of terms. In most cases, homeowners will use the funds from the new mortgage to pay off the old one. Depending on the terms of your new mortgage, there may or may not be cash left over which you can use to invest, pay down debts, make renovations or for other purposes.

Refinancing To A Lower Interest Rate

Mortgage interest rates tend to fluctuate over time and because of this, refinancing to a mortgage with a lower rate is quite popular. If you initially borrowed your mortgage when interest rates were at 5%, you may be able to lock-in a new mortgage at a lower rate. Note that it can be tough to try to “time” the mortgage market, so check in with your mortgage professional to find out if the time is right.

Refinancing For Lower Monthly Payments

Another great use of refinancing is to reduce the monthly payment required on the mortgage. If you have ten years remaining on a 20-year mortgage, refinancing to extend the payments out to 15 years will lower the monthly payment.

Refinancing To Eliminate Other Debts

Finally, many homeowners will refinance their mortgage to use some of the home’s equity to pay off other debts. For example, a family might have $25,000 in debts that are being charged a higher interest rate than their mortgage. If they have built up enough equity, they can refinance and draw out $25,000 from the home’s value. This shifts the debt from the higher interest areas into the mortgage, where it can be paid off over time.

As you can see, there are many reasons why you might want to refinance your mortgage. To learn more about the refinancing process, or to discuss your options, contact us today. Our professional team of mortgage advisors is ready to help you choose the path that best suits your financial needs.

Mortgage 101: This Is How Mortgage Refinancing Works, in Plain and Simple Terms

Mortgage 101: This Is How Mortgage Refinancing Works, in Plain and Simple TermsThere are so many unfamiliar terms involved in the real estate market that it can be easy to be confused by the jargon. However, some words are more important to learn than others if they can end up benefiting you in the long run. Whether or not you’ve heard of mortgage refinancing, here are the basics on what this may mean for your home and whether or not it’s an option you should consider.

Acquiring A Lower Rate

If you’re new to refinancing, the primary reason that most homeowners choose this option is to get a lower interest rate and pay less on the overall cost of their mortgage. Because a lower interest rate means that a higher amount is paid on the principal each month, you may be able to pay off your mortgage at a quicker rate. While this may sound ideal, you’ll need a certain percentage decrease in your interest rate in order to make this option financially beneficial.

A Shorter Loan Term

While refinancing doesn’t necessarily mean that you’ll be paying less on your mortgage payment each month, it does mean that you may be able to take advantage of a shorter loan term. Since the overall amount you pay on your mortgage may be lowered with refinancing, you may be able to pay off your mortgage more quickly without it bumping up the amount of your monthly payment significantly. There may be a slight difference, but the benefits can definitely outweigh the drawbacks when it comes to paying less over time.

Weighing The Refinancing Option

The decision to refinance may very well end up being a boon for your financial well-being, but it’s important to consider the pros and cons ahead of time in order to make an educated decision. You’ll also want to make sure you’ll be staying in your home a while to reap the benefits of your equity. Because there will be fees associated with utilizing this mortgage option, like closing costs and application fees, it’s important to look over the numbers and ensure that it works out in your favor at the end of the day.

Refinancing your home to acquire a lower interest rate can be a great financial decision, but it’s important to determine whether or not the price is right before you move forward with this option. If you’re currently considering refinancing your mortgage, contact one of our mortgage professionals for more information.

Refinancing This Spring? How to Choose Between Variable and Fixed Interest Rates

Refinancing This Spring? How to Choose Between Variable and Fixed Interest RatesFrom choosing a real estate agent to finding the right home, the process of getting a mortgage is rife with many different choices. If you’re investing down the road, it’s likely that you’ve heard about variable and fixed interest rates and are wondering about the differences between the two and how they can benefit you. While what will work best for you depends on your financial flexibility and market knowledge, here are some basics that will help you make a decision.

The Details on Fixed Rates

For many homeowners new to the market, the stability of a fixed rate is comforting because the interest rate will be set for the length of the loan period. This means your monthly mortgage payment will be the same and you will not be required to adjust your budget each month. While knowing your rate can offer financial security in a fluctuating market, it may actually end up costing more money down the road depending on what the rates are like over time.

All About Variable Rates

A fixed rate can provide security, but a variable rate is much like it sounds and will fluctuate with the market interest rate. This means that your monthly mortgage payment will not be fixed and in the event of market increases or decreases, your mortgage payment may change markedly. While the benefit of variable rates is that they can actually end up costing less down the road, they can be a burden for those who do not have market knowledge and are going to feel the stress of changing rates.

Choosing Between The Two

While it’s expected that interest rates will rise in the coming years, there are still no guarantees that variable rates will end up costing more than a fixed rate. This means that if you are comfortable with the fluctuations, a variable rate may be better, but if it’s consistency you’re looking for, you may want to choose a fixed rate. If you are struggling with financial stability month-to-month, a variable rate may be more economical over time, but a fixed rate will offer the security of knowing your costs.

There are benefits associated with fixed and variable rates, but it’s important to determine how comfortable you are with the real estate market and your finances before making a decision. If you’re currently in the market for a new home, contact your trusted mortgage professionals for more information.

Thinking About Refinancing Your Mortgage? 4 Ways to Ensure It’s Worth Your Time

Thinking About Refinancing Your Mortgage? 4 Ways to Ensure It's Worth Your TimeIf you’re familiar with the real estate market, you’ve likely heard the term ‘refinancing’ and may be wondering what this can mean for your mortgage and your financial well-being. While refinancing can be a great benefit for those who are looking for a lower interest rate or a different mortgage type, here are the details on what it can offer and whether or not it will work for you.

Acquiring A Lower Interest Rate

The most common reason people consider refinancing their home is to take advantage of a lowered interest rate. While it might seem like a minimal savings each month, a lower interest rate can add up to considerable savings over time and help you pay off your home loan more quickly. It’s just important to ensure that you’re aware of all the associated costs with refinancing before pursuing this option.

Limiting Your Loan Term

Refinancing also offers homeowners the opportunity to change the term of their loan, which can offer improved financial stability much sooner than expected. Many homeowners may avoid this option because it can bump up their monthly payment, but the difference in cost can be relatively insignificant while still offering financial freedom in less time.

Changing Your Mortgage Type

There are benefits and drawbacks of adjustable-rate and fixed-rate mortgages, and that’s why many people make the decision to refinance and opt out of their rate profile. While fixed-rate mortgages offer stability since you’ll know what you’re paying, an adjustable-rate will move with the market and can actually mean more savings at the end of the day. The option that will work best for you is dependent upon how comfortable you feel with the market.

Consolidating Your Debt

For homeowners who have a high debt load, refinancing can be a means of paying less in order to pay down debt at a more rapid rate. However, it’s important before choosing this option to determine a budget plan you can stick with, as refinancing to consolidate your debt does not necessarily mean you’ll be successful at paying it down. Ensure you weigh your options and potential savings carefully before making a decision.

Refinancing may seem like a good financial decision, but there are costs that go along with this mortgage option so it’s important to crunch the numbers to ensure it will work in your favor. If you’re currently considering refinancing, contact one of our mortgage professionals for more information.

Refinancing Your Mortgage: How To Get The Most Out of Your Home Equity

Refinancing Your Mortgage: How To Get The Most Out of Your Home EquityWith interest rates on the rise following the 2016 election, it’s possible that you’re now considering your options for refinancing your current mortgage. It can sometimes be hard to know all of the ins and outs of making this choice, though, and it’s important to know what’s involved. If you’re trying to determine if refinancing will work for you, here are some of the basics on this option and what it can mean for your equity.

Acquiring A Lower Interest Rate

One of the most common reasons for re-financing is to get a lower interest rate on a mortgage in times of a fluctuating market. While it may seem like this is more hassle than its worth, if you are able to get an improved rate, this can add up to considerable savings over time. While the once suggested percentage for refinancing was 2%, with economic times changing it can be worth looking at the numbers to determine if this option is financially viable for you.

Building More Equity

The great thing about negotiating a better interest rate for your mortgage is that it will not only lower your monthly mortgage payment, it can be a greater financial benefit over time. For example, if you have an 8% interest rate on a $250,000 home, adjusting your rate to 6% per month will mean a decrease in your monthly expenditures. Since you’ll be paying less interest overall, you can up your monthly payment and pay off the principal even more quickly.

Will Refinancing Benefit You?

While refinancing can be a great option if you’re able to get a better rate and are planning on staying in your home to reap the benefits, there are things to consider when making this choice. If you’re refinancing in order to make a big expense or renovate, these may be financially beneficial choices, but they can also be bad for the bank if budgeting isn’t kept in mind. It’s also worth realizing that there will be fees associated with refinancing, from the appraisal to the application, so ensure the new rate makes up for these costs.

There are many benefits associated with refinancing your mortgage, but it’s important to be aware of the costs involved and the financial benefit to you in the long term before making a decision. If you’re currently reconsidering your mortgage, contact one of our local mortgage professionals for more information.