Why Should I Refinance?

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With falling interest rates, we are getting a lot of calls from people looking to refinance…but they don’t always know why and if they should.  Here are some reason why a refinance makes sense.

  1. You can get a better/lower interest rate.  I hear from clients a lot, “what is the rule of thumb?  If I can lower my rate by 1%, then a refinance make since right?” That isn’t necessary true, I’m not sure where that saying came from.  You have to take a look at what you have now versus what the new loan is offering.  Let us help you compare apples to apples.
  2. Lower your term.  Maybe you want to cut years off your mortgage, for example, dropping from a 30 year loan to a 15 year loan.  Keep in mind, if you are dropping your term, you will not be able to compare apples to apples with your current loan.  For something like this, you need to look at your interest savings over said term.
  3. Tax Savings. With the tax laws now changed, you can no longer write off interest from your 2nd mortgage.
  4. Debt consolidation.  Maybe you want to consolidate your debt.  This could be a 1st and 2nd mortgage, paying off credit cards or other high interest loans into a lower monthly payment.   You can consolidate your debt up to 80% of the appraised value.
  5. Pull out equity. Perhaps you have some big expenses coming up.  Sending a child to college, renovations on your home, or maybe you want to put in that pool you were always dreaming of.  You can pull out equity in your home up to 80% of the appraised value.
  6. Divorce. If you are going through a divorce, there is no way to take a spouse off of the mortgage.  The only way to get their name off is to do a refinance.  And the best part is, if you owe them equity out of the home, a divorce is treated as a rate-term refinance and therefore you will not have any pricing hits that you would have with a cash-out refinance.

To see if a refinance make since for you, give Team Rebecca a call 717-609-4044 or click HERE to read more about the refinancing process.