If you’re a homeowner, you may be trying to pay your mortgage down faster. Here, we cover some of your options, and what you should consider.
In keeping with October’s theme of renovation. Our blog posts have been exploring how clients can increase the value of their homes while enjoying their living spaces. This article will explore that by seeing why people choose refinancing instead.
As such, we figured a brief guide on why the heck anyone would choose to refinance at all might be in order.
5 Reasons Folks Choose Refinancing
- Lower Borrowing Rates. Getting a lower mortgage rate that reduces the overall cost of the loan through refinancing will ultimately result in savings. Refinancing can often allow more breathing room financially when renovating without increasing mortgage payments. Not exactly rocket science, perhaps, but still a definitive benefit to refinancing.
- HELOC = Not Hot. While individual situations must be taken into account, generally speaking, refinancing is the better choice for contemporary borrowers. As we’ve mentioned before, HELOCs can be dangerous but for the most discerning homeowners.
- Shorten Loan Terms. With interest rates slowly but surely on the rise, now may be a prime time to consider refinancing. With rates still relatively low, you may find that a 15-year mortgage is more practical than the 30-year loan you’ve been working on!
- Lower Your Payments. Refinancing at a lower interest rate could actually mean drastically reducing your payment and saving goodness knows how many dollars in interest (ballpark: potentially tens of thousands).
- Lock It Down. Real talk? Rates are continuing to rise, so if a nervous twitch has developed from your efforts to ride the variable rate wave beware: it’s nowhere near cresting. Generally, we’re still suggesting clients hold the line – but refinancing to a fixed rate mortgage product is a perfectly respectable choice (well worth your peace of mind).
The long and the short of it is that people choose to refinance for a variety of reasons. But, the smartest factor the tangible (ROI) and holistic (quality of life) benefits before deciding.
That and speaking with an unbiased, qualified mortgage broker of course!