Is a Mortgage Finance Right for You?

Jan 26, 2018

Interest rates are currently at historic lows, and that has many homeowners wondering if a mortgage refinance would be a smart financial move.

To figure out if a mortgage refinance is right for you, consider the following before submitting any paperwork:

There are two major mortgage refinancing methods:

  • If you are looking to save money, consider a rate and term refinance. This allows you to refinance your current mortgage at a lower interest rate in a time frame that will fit your budget.
  • A cash-out mortgage permits you to take out a new mortgage for more than you currently owe on your existing mortgage. You can use that additional cash to pay down your current debt.

Reasons to refinance:

Refinancing your mortgage may prove to be the right financial move for you if you want to replace your existing adjustable rate mortgage with a fixed-rate mortgage. With a fixed rate mortgage, your monthly payment remains constant for the duration of the loan, meaning you won’t have any surprises when you pay the bill every month.

Various life situations – including the death of a spouse or partner and divorce – can leave homeowners with little option but to refinance their mortgage in order to meet their financial or legal obligations.

And, if you are looking to drop FHA required mortgage insurance, you might also want to consider a refinance as a way to lower your monthly payments.

Consider your financial break-even point before refinancing.

Don’t forget to factor in how much it will cost to refinance your mortgage before making your final decision. Closing costs can add thousands to the bottom line, so figure out your break-even point by dividing the closing costs by your monthly savings.

To learn more about the benefits of refinancing your mortgage, contact the experts at Beaches Title, who are ready to make your home refinance a quick and easy experience.