Homeowners, are you considering refinancing your home? There are reasons to refinance and reasons not to refinance. Homeowners Should You Refinance?
There are several reasons to refinance
- reduce monthly mortgage payments
- reduce mortgage interest rate
- consolidating a first and second mortgage
- converting from adjustable to a fixed mortgage rate
- consolidate debts
- home remodeling or repair
- pull-out cash
- do not want to sell my home
Homeowners considering refinancing is a decision only the homeowners can make. June 2015 the interest rates were around 04%. Mortgage rates are low. There are things to consider before refinancing.
Reasons to Refinance Your Home:
- Existing loan’s interest rate higher than current mortgage rates.
- Convert from an adjustable rate to fixed rate mortgage.
- Consolidate mortgages (example consolidating first and second liens)
- Convert from a 30-year loan to a 15-year loan.
- Refinancing with lower mortgage interest rate should reflect substantially lower monthly payments
- To consolidate debts.
- Make necessary deferred maintenance on the property.
- Home improvements that will increase the value of the home.
- To get rid of Private Mortgage Insurance (PMI).
- Convert some of the home equity into cash.
Reasons Not To Refinance
- Existing loan 10 years or less remaining years and new loan 15-30 years. Does it make sense to refinance?
- Cost of the refinance? What are to total fees for the new loan (points, appraisal, closing costs, etc)?
- Considering lenders fees (closing costs) is the rate of returns after refinancing beneficial?
- Compare your existing interest rate to current market rates?
- If you are considering selling your home in next few years does it make sense to refinance NOW?
- Is the value of your property increasing or decreasing? Is the equity in your home enough for a refinance?