Leave a Message

Thank you for your message. We will be in touch with you shortly.

Is it Smart to Refinance?

Is it Smart to Refinance?
Your home mortgage is an important investment in your future, and a mortgage refinance can be a smart move to help you manage your investments when used under the right circumstances. Here are some things to consider about refinancing your mortgage.
 
Simply put, when you refinance your mortgage, you are taking out a new loan to pay off your original mortgage, so the first question to ask yourself may be is there a better product available to you than what you started with?
 
Refinancing allows you to borrow against the equity you have built up in your home and take out cash you can use to pay off other debt, make home improvements, or invest in your retirement. For example, let’s say you have $70,000 of equity in your home, but still owe $175,000 on your mortgage. You may take out a new mortgage for $200,000 that is used to pay off the first mortgage, and then pays you $25,000 in cash. If you have made regular payments on your initial mortgage for at least five years, you probably have enough equity built up to take a cash-out mortgage.
 
Another reason to refinance is to reduce your monthly payment to give you more flexibility in your monthly budget. When you refinance, you are basically starting over on your 30-year commitment, but, if you are not taking cash out, your new mortgage amount will be lower, so your payments decrease.   If you originally took out a 15-year mortgage, changing to a 30-year term will lower your monthly payment considerably.
 
You may also choose the opposite and switch from a 30-year loan to a 15-year term. Your monthly payments will likely increase, but you will pay your loan off earlier and pay less interest.
 
Another reason people refinance is to change from an adjustable-rate mortgage (ARM) to a fixed-rate. This eliminates fluctuations in your monthly mortgage payment and may help you take advantage of favorable rates.
 
Before you decide to refinance, do some homework. You should perform an audit of your monthly budget, assess your short and long-term financial goals, check your credit score, watch interest rate fluctuations, and consider the costs involved in refinancing ads there will be closing costs on your new loan. 

Recent Blog Posts

Stay up to date on the latest real estate trends.

The Best Time to Sell Your Home

and the home selling timeline

Fresh Year, Fresh Start: Cleaning Out Your Home for the New Year

Many of us could not wait to close the door on 2020 and usher in the new year– and all the positive karma we hope comes with it! As you look forward to 2021 you may ha… Read more

Seller

Seller FAQs

If you have a home to sell, you’re probably excited to get the process started. There are many things you need to consider when selling your property, and it’s hard no… Read more

Real Estate

Pros and Cons of Selling During the Holidays

If you are thinking about listing your home this fall, you might be concerned about showing it, and possibly having to move, over the holiday season. The holidays are … Read more

Considering Short Term Rentals?

Considering Short-Term Rentals? Short-term rentals can be a highly lucrative investment and a fun way to make money. Some of the advantages to managing a short-term re… Read more

8 Reasons Why Real Estate is the Best Investment

Real estate has long been considered a solid investment for many reasons. It is a relatively safe and easy way for people to build wealth beginning with a small amount… Read more

7 Tips for Saying Goodbye to Sentimental Belongings

When I work with clients who are downsizing to a smaller home, one of the hardest chores they face is letting go of sentimental belongings they no longer have room for… Read more

Home Renovations Q&A

Renovating Your Home? Check Our FAQ’s! How do I pick a contractor? Ideally, you want to build the same kind of relationship with your contractor as you do with your re… Read more

Is it Smart to Refinance?

Your home mortgage is an important investment in your future, and a mortgage refinance can be a smart move to help you manage your investments when used under the righ… Read more

Let's Talk

You’ve got questions and we can’t wait to answer them.