Most Common Reasons to Refinance Your Home
√ You have a fixed-rate mortgage and are looking to lower your interest rate
√ You have an adjustable rate mortgage (ARM) and are looking to get a fixed rate
√ You have multiple mortgages on your home and would like to consolidate them into one
√ You have a long-term loan and would like a shorter-term loan so you can pay it off more quickly
√ You have a short-term loan and would like a longer-term loan to reduce your monthly payment
√ You want to move from an interest-only mortgage to a loan that pays down the principal
√ You need some extra cash to make a purchase, home improvements or to pay off other debts
This option allows the homeowner to refinance their home for more than they currently owe. The difference between what they owe now, and what they refinanced for, is given to the owner in cash. Homeowners need to be very cautious when utilizing the cash-out refinance, and make sure that they aren’t setting themselves up for financial troubles when they are ready to sell their home.
To Obtain A Lower Fixed-Rate
This is a great reason to finance, especially if your current fixed rate is substantially higher than today’s fixed rates. This option can also work well if you have an adjustable rate mortgage and want to get into a fixed rate. Your adjustable rate may be low today, but it may not stay that way in the long run. Refinancing your adjustable rate can ensure a low fixed rate mortgage. When considering this option, visit with your mortgage broker to make sure the costs makes sense. Often times, refinancing to lower your interest rate only makes sense if you plan to stay in your home for at least 5 more years.
Shorten Your Loan Term
Are you looking to pay your mortgage off faster? Refinancing into a shorter term loan will most likely increase your monthly payment, but substantially the interest paid over the life of the loan. There are also tax benefits on the interest you pay on the shorter loan term. We encourage you to visit with your accountant to discuss any tax benefits.
Longer Loan Term
Needing to decrease your monthly payment? Sometimes homeowners choose to refinance their home into a longer term mortgage, because they need to decrease their monthly payment. This option ultimately increases the amount of interest you will pay over the life of the loan. Visit with your mortgage broker to see if this is the best decision for you.
What Are the Next Steps?
Step 1: Know the structure of your current mortgage (loan type, interest, payment & terms), and understand the reasons for your refinance.
Step 2: Call Galipeau Mortgage today to see if refinancing is possible for you, and if the new rates and terms make sense for your financial needs.
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