Reasons for Refinancing

The Federal Reserve announced in December that for the first time since the before recession that interest rates will go up gradually. Even though lenders are offering lower interest rates now experts believe they will begin to increase. So it may be time to think about refinancing your mortgage. Besides saving money, here are some reasons to refinance your home.

If you have an interest rate of 4.1% on a 30-year loan but you can get a 3.3% interest on a 15-year loan, the amount of time it will take to pay off is half of that while only adjusting your payments slightly each month. If this is in your budget then it might be a good time to refinance.

If you have an adjustable rate mortgage, it may be time to switch to a fixed rate.  The rate may not change but the payment would be stable allowing you to save money over the course of the loan. Locking in a low rate now will ensure savings as opposed to ARM going back up over the next several years.

If you have equity, refinancing could allow you to access cash to pay off higher rate loans such as credit cards or student loans. You could also use the extra cash to start a business or invest in rental property.

If you have a second mortgage on the home, or a home equity line of credit, you can use your refinance to combine the two therefore getting rid of the home equity line of credit. Borrowers may do this if they are fearful of rates going up in the future on the equity line.

If you are facing a family issues, like divorce or needing money to help a family member out then refinancing your mortgage can help. A refinance can remove the former spouse from the note.

If you would like more information about refinancing your current mortgage or if you have additional questions, feel free to give us a call we would love to hear from you!