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Your home's financing isn't final.
The decisions you made when you bought your home were based on your
financial situation at the time. However, your income, the mortgage
market and the real estate market can change. This is why you should
always assess the applicability of your mortgage to your current
situation and future plans to determine if a refinance is in order. There
are a variety of reasons why you might want to refinance:
- Take advantage of a lower
interest rate. Rates
have been at historic lows, but there is no guarantee how long this
will last. If you can get in now before they begin to climb, you can
keep your monthly payments low.
- Opt for a fixed rate over an
adjustable-rate mortgage. If
your current loan is an ARM that will soon adjust upwards, you might
prefer the stability offered by a fixed-rate mortgage.
- Access needed cash. Cashing out a certain amount at a
mortgage's much lower rate to pay off a debt — say, a credit card —
at a much higher rate often makes solid financial sense.
- Change your loan terms. Opting for a shorter loan term — say,
15 years instead of 30 — will help you pay off your debt sooner and
save significant money over the term of the loan. If your income has
decreased you may wish to extend the term of the loan.
- Cancel private mortgage
insurance. PMI is
required of borrowers who put down less than 20 percent on their
home. If you've been in the home a while, you may have gained enough
equity so that you no longer need the PMI.
- Consolidate your first and
second mortgages. This
could mean significant savings for you over the long term.
With 25 years closing mortgage loans Caroline
Gerardo has the know how to help you find what is right for your life,
even if it is best to keep the loan you have.
Whatever your reasons for wanting to refinance, there are a number of
factors you'll want to consider. With California property values
increasing in many areas, this might be important to review.
Another key concern is whether or not the costs of a refinance are
recouped by your lower rate. All loans have closing costs associated with
them, and you want to make sure that whatever savings your new loan
delivers will also be worth the closing costs. Typically, you want to
make back your closing costs within two years.
As you can see, there is a lot to consider, which is why it makes sense
to sit down with an expert and review all the key considerations and do
all the necessary calculations to ensure you're making the smartest
financial decision you can.
Are you considering refinancing your home loan? If
so, I would love to help you make the most informed decision possible.
Please contact me today! (949) 784-9699
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