Mortgage Refinance
The economy is down, buying power has plummeted, and debt is at an all time high. It seems as though there is no end in sight to the issues, but this year is the best year for refinancing your home. Real Estate prices, value, and interest are at an all time low. If your original loan has a fixed interest rate then now if the perfect opportunity to refinance due to the fact that fixed interest rates have dropped considerably. Refinancing could could result in a more favorable interest rate.
Mortgage Refinancing benefits
Refinancing allows opportunity to capitalize on your personal finances. If you are in need of extra cash then refinancing can be of great help. Our mortgage payments are the largest monthly expense and reducing the payment while taking advantage of extra currency is ideal for those individuals needing a solution to their personal finance problems. Refinancing allows you to take advantage of the equity in your home and utilize your largest personal asset.
Lower Rates & Lower Payments
At the time of the purchase of your home interest rates are dictated by the financial environment. Other factors that influence your interest rate are credit ratings and down payment amounts. Interest rates fluctuate up or down and when the federal reserve enters a cutting rate period the interest rate could be dramatically reduced resulting in lower interest rates and lower payments. Refinancing allows you to take advantage of exchanging higher to lower interest rates thus reducing your monthly payment.
Mortgage Length Reduced
Refinancing allows you the opportunity to shorten the length of your mortgage. You can potentially save thousands of dollars in interest by refinancing your mortgage. You can take a 30 to 40 year mortgage and reduce it by half allowing you to taking advantage of a lower interest rate and also building equity by maintaining the same monthly payment with a lower finance rate. You would be paying more to the principal rather than the interest.
Adjustable Rate Vs Fixed Rate
Adjustable rate mortgages fluctuate up and down versus fixed rates remain stationary. Factors that influence fixed vs adjustable are the real estate market. If you are in a financial situation that will potentially change in the future then you might want to opt for an adjustable rate. For those who are comfortable financially they may want to opt for a fixed rate. Your monthly mortgage is the largest monthly expense and an adjustable and or fixed rate can dramatically affect your monthly expenses.
Utilize Your Equity
The single most important and useful method of mortgage refinance is to utilize the equity in your home that you have acquired and refinance for a higher amount of your current principal balance. This will allow you to take full advantage of the extra funds. Some will capitalize on many aspects such as home renovation to stimulate appreciation of the value of the home, debt consolidation ,and future funds.
