You've probably been hearing a lot about refinancing lately. With today's low rates, it seems like everyone is doing it. Refinancing can be a great tool to help you save money, increase your cash flow, or improve your loan terms. The secret is knowing when it's the right time to begin the process. Let Downs Financial help you with your mortgage refinance. We can help you determine whether refinancing is right for you, and we offer some of the most competitive loan packages in the business.
When you refinance your mortgage, you're basically taking out a new mortgage in order to pay off your old one. The most common reasons to do so are to lock in a new, lower interest rate or to improve your loan terms. For example, if your income has increased substantially since you took out your first home loan, you could refinance your 30 year mortgage with a 15 year mortgage and pay it off in half the time while increasing your equity more rapidly. Conversely, if you need to lower your monthly payments you can refinance with a long term mortgage and/or a lower interest rate.
If you qualify, you can refinance for more than the actual amount you owe on your first mortgage. With the extra money, you can consolidate your debt by paying off credit cards with your new lower rate loan, or you can fund expenses like home repair or a child's education. This type of refinancing is termed a cash-out refinance, while refinancing for better mortgage rates or terms is called a rate-term refinance. Downs Financial offers its customers both types of loans, and because we're a direct lender, you'll find the entire loan process runs more smoothly and quickly.
When Is It the Right Time to Refinance?
Although refinancing your home can be a great financial move under the right circumstances, it isn't right for everyone. There are significant costs associated with refinancing your mortgage, and it only makes since to do so if you will stay in your home long enough to recoup those costs. Say, for example, that the costs and fees associated with your refinance would total $4,000, and by refinancing you end up reducing your monthly payment by $100. It will take you 40 months, just under three and a half years, to make back your $4,000 and actually begin to realize any savings. Let one of the experts at Downs Financial discuss the different aspects of refinancing with you. We can help you determine whether it makes financial sense for you, and then help you to find a loan that will meet your needs.
