Earlier this year we were concerned about rising mortgage rates, but fortunately, rates are still at historic lows. If you’ve been in your home for a while or just have a rate higher than currently in the market, it may be time to refinance.
Here are some reasons to think about:
- Lower your interest rate.
- Lower your payment.
- To move from one loan type to another. (I’ll elaborate later in this post.)
- Shorten the term of your loan.
- Tap equity to use for investment, debt consolidation, or to support college for a child or grandchild.
Reducing your mortgage rate by 2% could make you a good candidate. Here’s a link to the article where I pulled the 2% number.
Why Move to a Different Type of Loan
You may also be a good candidate if you took out a loan with a balloon payment. This is one example of a loan type where you could benefit in moving to a fixed rate loan.
You may have bought your home with a little higher interest rate in order to get the loan. (For example, to offset the lower credit rating you had at the time or get better upfront cash terms.) Refinancing is definitely worth looking into for many reasons, and a lower payment is only one thing to consider.
There is also a VA loan product to reduce your interest or refinance your loan and remain in a VA product. One of my clients was able to use this product to set himself up for a VA assumption when he gets ready to sell next year. I’m not going to post a link here because it’s best to start with a reputable lender and avoid the advertisements a search will bring up.
A lender can help you make the best decision for you, and I’d be happy to provide you some names and numbers. Contact me if you’d like the names of the exceptional lenders my clients have worked with.