Q: Could You Benefit From a Refi?

Thinking about a refinance? Here’s some great info to consider.

There are plenty of reasons to refinance a home, but of course there are also just as many reasons to hold off on making that financial decision. You can only know whether a refinance is in your best interest as a homeowner if you have all the basic facts. What, exactly, is refinancing good for? 

There are two common types of refinance, the first being a cash-out refinance. This is typically used whenever a large sum of money is needed to cover other expenses like medical bills, major home improvements, a child’s college tuition, or even to pay off high-interest credit card debts. Of course, debt consolidation does present a pitfall; if you lower your credit card debt significantly but fail to keep that debt low afterward, then you haven’t gained anything. Provided you implement good money management skills, this type of refinance can be a smart play.

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       Lowering your rate from, say, 5% down to 3% is huge savings!

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The other popular option is a rate refinance, the purpose of which is to lower the interest rate on your mortgage. Lowering your rate from, say, 5% down to 3% is huge savings! If a refinance were to cost you $4,000 once but save you $200 every month after, it’ll take less than 20 months to break even. From then on, you’ll be saving incredible amounts of money. A rate refi, therefore, is also a smart move financially. 

I encourage you to check in with your financial advisor or lender for a clearer picture of your money makeover. In the meantime, you can give me a call or send an email if you have real estate-related questions or are ready to buy or sell in today’s market. I’m always here to help!