The days of securing a mortgage from a bank and sticking it out to the end are long over, and homeowners have many options for both financing and later refinancing their mortgage. There are several reasons why refinancing may be a good idea for you now rather than later; let’s look at five of them.
Shorten the term of your mortgage — You may have a fixed 25- or 30-year mortgage at a reasonably good interest rate. If you shorten the term of the mortgage to perhaps 15 years, you will pay a great deal less interest over the life of that mortgage. Plus, you will get rid of the mortgage that much faster. With very low interest rates in the marketplace right now, use an on-line mortgage calculator to determine what your monthly payment will be for various mortgage terms. You might discover that your payment may be similar to what you are paying now. If that’s the case, go get that refinancing done.
Lower your interest rate — Perhaps you are comfortable with the terms of your mortgage, and don’t want to see an increase in monthly payments with a shorter term refinance. You should still take advantage of any lower interest rates out there, and refinance for the same term if you wish. If you are used to a particular monthly payment, put the difference in the bank once you get your refinance done, and make an occasional extra payment with the savings. You will pay the mortgage off faster with less total interest paid.
Lower the monthly payment — For the same reason a lower interest rate will help you, so will a lower monthly payment. The low interest rates in the market now are too good an opportunity to pass up. We don't think anyone will object to a lower monthly mortgage payment, so this should be the incentive you need to refinance.
Get rid of an adjustable-rate mortgage — There may have been a time in the past to have an adjustable-rate mortgage (ARM), particularly when mortgage rates were high and an ARM started at an attractive low interest rate. Now, you may be seeing annual interest rate increases as the ARM adjusts itself. This is an excellent time to refinance away that ARM and get a low fixed rate mortgage.
Get some cash out of your equity — A cash-out refinance will let you take advantage of lower interest rates to get some cash out of your accumulated equity in your home. If you are looking at a home improvement, or kids going to college with high student loan rates, doing a cash-out refinance in today’s market might make perfect sense. Keep in mind that your loan principal will be the old mortgage balance plus the cash you receive, so do your homework to make sure the new monthly mortgage payment falls within your budget.
AHL Hard Money Loans can help you get cash from the accumulated equity in your home. Our incredible Tampa Private Investors are looking for opportunities to work with you, so contact us today and let us connect you to them for the money you need.