Right now mortgage rates are incredibly low. So is now a good time to refinance your
home? It might be. But before you do you want to crunch the numbers
and make sure this is the right move.
Closing costs to refinance are expensive and you want to make sure it is
going to be worth it. But a lot of
contributing factors can negate that expense in the long run.
Is the interest rate a lot lower? If the interest rate is 1% or more lower than
your current rate then it very well might be worth doing. Run an amortization schedule on your current
balance with a lower interest rate and see how much you will save over the term
of your mortgage. In most cases the
savings is significant.
If you have equity in your home there are a few more things
to consider. Do you have a lot of
consumer debt or student loans you could add to your refi that would clear up
your debt load. Right now is not a good
time to carry a lot of consumer debt.
Usually by rolling a large amount of debt into a refi it will lower the
total amount of payments going out each month.
But be very careful. If you go
right back out and accumulate more consumer debt then you will find yourself in
trouble once again.
If you currently have a mortgage with a lender you are not
happy with it may be a good idea to shop around for another lender. Sometimes peace of mind and a better quality
experience is really all you need to justify the cost to refinance your
home. Benefits come in many forms.
So is it the right time to refinance your home? Weigh and measure the pros and cons, do the
math, and consider how long you intend to remain in your home before you
sell. At the end of all of that, if it
feels like the right decision for you then contact a lender and see what they
have to offer. It just might be the
right time.
My daughter just refinanced. Payment is about the same $$$ but it's paid off 10 years sooner.
ReplyDeleteI really admire how you live your life and I gain a lot from reading.
Susan
Your daughter made a very wise decision. Good for her!
DeleteThank you Susan for being a devoted reader.
"If you go right back out and accumulate more consumer debt then you will find yourself in trouble once again."
ReplyDeleteLOUDER FOR THE PEOPLE IN BACK!!!
LOL. Exactly right!
Delete