Many homeowners use this “cash out” to finance home improvement, the purchase of a new car, college tuition or even to buy a vacation home. The use of refinancing can be convenient for some homeowners because it allows the mortgage and the new purchase to be paid from the same monthly bill. If you are interested in mortgage refinancing, contact us to talk with a mortgage refinancing expert.
Generally, it is a good idea for you to look into mortgage refinancing if:
- You will still be at your current home in ten years
- Your credit been maintained or improved since your first mortgage
- Mortgage rates have dropped 2% since your first mortgage
- The term of your loan is too short or too long
- You are unhappy with your adjustable rate.
- You need a low interest loan to cover a large expense
With interest rates at all time lows, many homeowners are looking into mortgage refinancing. If interest rates have fallen 2% or more since you closed your mortgage, refinancing may save you a lot of money. Take a moment to contact us and free check up to four lenders about refinancing your mortgage.
Refinancing is in the simplest terms possible, the act of replacing your current loan with a new loan, which is why it gives you the opportunity to use your previous experience obtaining a loan to find the one that is right for you.
If you only have ten or less years left to pay on your loan, refinancing may only serve to stretch out your payments for another thirty years. However, if in your case, it is more important to have lower monthly payments it may be well worth it to refinance.
If the answer to the above questions were no or you are not planning to remain in your home for the next ten years but would still be interested in a loan, refinancing may not be your answer but there is a loan that will suit your needs and it is just a matter of finding out what loan is best for you.
If interest rates are not at least 2% lower than your current loan rate, then it may not be worthwhile to refinance. New closing costs and miscellaneous fees may cancel out much of the bonus that would come along with a new loan. However, if your current loan is an adjustable rate mortgage and security is important to you, refinancing may be right for you regardless.
“Cash-out” refinancing allows you to do all of these things while borrowing extra money for certain expenses. The most popular of these are home improvement and college tuition. However many people use refinancing to pay for the purchase of a new car. Financing a new car often requires you to take on an interest rate much higher than that of a refinanced loan. Using money from refinancing to make such a purpose is another way to save money. Debt Consolidation is another use for “cash-out” refinancing. Rolling your debt into one monthly bill is convenient and helps to make paying your bills an easier process. Also, for those severely in debt, it gets rid of harassment from collections.
If you would like to utilize one or more of the above options then refinancing is for you. Though it is the same process as borrowing the original loan, refinancing can often be easier on the borrower. Many fees that generally come along with finding a loan can be waived, such as the application and appraisal fees. Some lenders will allow you to take the loan without paying any points or closing costs. Points are an amount usually paid at the close of the loan. Each point equals 1% of your loan. The more points paid, generally, the lower the interest rate. By rolling the cost of the points and miscellaneous fees into the total of the new loan, you can still manage to refinance to a low interest loan with little money out of pocket.
If you find the falling interest rates frustrating because you know that you are paying much more than you would have if the rates had been as low when you closed your loan, refinancing is for you. Loan refinancing allows you to:
- Have lower monthly payments due to lower interest rates
- Change to a fixed rate loan
- Place a lower cap on an adjustable rate loan
- Take advantage of improved credit
- Shorten or lengthen the repayment period of your loan
- Use home equity to take cash out for a large purchase
Use loan refinancing finance to repair your credit, improve your home, or find a better interest rate. Fill out our free short form to start the refinancing process today.