The Right Time To REFINANCE
Contact Kelly Lebor to talk more about refinancing!
- Looming debts
- Home improvement projects
- Extra cash for such things as higher education or holiday spending
After the financial crisis in 2008, refinancing became a viable option for those wanting to convert from an adjustable-rate mortgage (ARM) to a fixed-rate. Some are still in ARMs with rising variable rates, and a refi with a fixed-rate mortgage gives some peace of mind against future rate increases. On a different end of the spectrum, some want to be debt-free and look to a refi to shorten the life of the loan. Refinancing from a 30-year to a 15-year mortgage term will knock out your loan in half the time, freeing up funds later in life for other important expenses, like college tuition or a larger retirement nest egg. Refinance can also release capital to help with unpaid tax liens for homeowners nervous about potential garnishments or future tax filing. While the sound of a refi may be appealing; tread carefully because those benefits don’t come without a price. Count the Cost Before you start the refi process, be sure to speak with your mortgage lender to get a clear picture of how much the new loan will cost. Depending on your situation, there may be several fees to consider, including a refi application fee (which is non-refundable, even if the application is denied); an appraisal fee, and a loan originator fee — all of which can add up to 3% – 6% of the loan’s principal. That said, the cost of a refinance could outweigh its benefits, especially if you don’t plan on staying in the home long. Work with a mortgage lender you trust to learn about your options and to see if a refinance is the right move for you. Sources: https://www.investopedia.com/mortgage/refinance/when-and-when-not-to-refinance-mortgage/ https://smartasset.com/mortgage/the-costs-and-benefits-of-refinancing https://www.nerdwallet.com/blog/mortgages/how-to-refinance-your-mortgage/ https://www.pennymacusa.com/refinancing/how-refinancing-works