Can Mortgage Refinancing Secure You a Lower Interest Rate? Is it the Right Move?
In historical terms, interest rates are currently low. Refinancing could offer you a lower interest rate on your mortgage. Compared to more recent times mortgage refinancing may or may not be a good idea for you and your family right now. Here are some things to think about when it comes to mortgage refinancing. Contact us to discuss your mortgage refinancing.
Why do You Want to Refinance
If you are looking to refinance solely because rates are low, make sure it is a situation that will be beneficial to you. There are many costs associated with mortgage refinancing, such as closing costs, down payment, and your mortgage payments will be interest heavy again.
Refinancing your mortgage after you have been paying on it for over a decade could end up costing you more in the long run, because you have already paid a large amount of the interest you owe to the bank. You could also be subject to new terms and conditions like early payment penalties and higher mortgage insurance rates as well.
Other disadvantages include:
- Ending up with a higher rate because you did not pay for closing costs or provide a downpayment.
- Loss of equity in your home.
- Your net worth could also take a hit.
If you are looking to refinance to extend the time you have to pay down your balance and lower your mortgage payments significantly, refinancing could be a good option. Other reasons mortgage refinancing could be great are:
- Your credit is better, and you will qualify for the lowest rate loans.
- Increasing your cash flow to pay down debt with higher rates.
- Paying less interest overall (depending on how much you have paid interest already).
- Refinancing could help you to save more money in the long run and increase your net worth.
Who Should Refinance
If you are thinking about mortgage refinancing. Sit down with a banker or a calculator, do the math, and ask the following questions.
- What will refinancing afford you?
- Will you end up paying more in the long run?
- How will it affect your credit?
Ask the Experts
If refinancing your mortgage at a lower rate will help you get out of high-interest debt payments, help you pay off your loan faster, or save you money in the long run, then take the plunge. There are many great reasons to refinance today. Consult our experts to find out if mortgage refinancing is the right decision for you.