Reasons to Refinance
The decision for whether or not to refinance your home can be a difficult one to make. There are a number of factors to go over when figuring out if refinancing is good for you. The team at Oceanside mortgage is ready to assist in any refinancing options you may undertake; however, we’ve compiled a list of some of the important variables you may want to consider before refinancing your home. Take a look this week as we uncover a few possible reasons to refinance your home.
Get rid of or reduce mortgage insurance
If your home’s value has increased since you purchased it, mortgage rates are low, and you’re ready to get rid of or drastically reduce the amount you pay for your mortgage insurance, it may be a good time to refinance your home. Some loans may require that you wait a certain length of time before refinancing, so you may want to consult with a professional before deciding your options.
Shorten (or lengthen) Your Term
As life happens, things come up. Maybe you aren’t making as much money as you wanted to be a few years into your mortgage. Maybe you’re making way more! In either case, refinancing to shorten or lengthen your term will adjust your monthly payments if necessary. By extending your term during a refinance, you’ll end up paying more in the long run, but you lower your monthly payments. If you refinance for a shorter term, you’ll pay more monthly, but the interest won’t accrue as much and you’ll pay less over the long haul.
Lowering your rates
Most mortgage lenders agree that even a 0.5% difference between your current interest rate and a refinanced rate could be worth the trouble. Talking to a professional or using a mortgage calculator are easy ways to find out how a new interest actually affects your monthly and overall bottom lines. Everything from your credit score to the current housing market to your current income can affect your refinance, so don’t fret if you think it’s too soon after taking out your mortgage to refinance. Even just one year can mean a huge difference in your rates with a refinance.
Cash out home equity
Cash out refinancing is a great way to settle debts in other areas. Car loans and student loans compounded on top of a mortgage loan can make for a crazy monthly payment. Using cash out refinance, you can “take out” the equity you’ve already made on your home in cash, then use it to pay off other debts. That way, after the refinance, you only have your home loan to worry about. Cash out refinancing is a move many people either don’t consider or don’t know about; however, it can be one of the easiest roads to debt consolidation for a homeowner.
These are just some of the many reasons people choose to refinance. To find out whether refinancing is a good option for you, do some research, find a mortgage calculator, or call Oceanside. We’ll walk you through the process and help you find out if refinancing is smart for your future.