Is Now the Time to Refinance Your Home?
With interest rates near historic lows, Position Wealth has been receiving a lot of questions on home refinancing. Here are a few important items to consider when evaluating whether to refinance:
- How long do you plan on staying in your home? If there’s any chance that you’ll be moving within the next few years, it probably doesn’t make sense to refinance just to lock in a lower rate (i.e., there are upfront costs associated with a refinance).
- What is your current loan interest rate vs the refinance rate? Getting a lower rate can reduce your monthly payment if the length of the loan stays the same.
- Do you want to shorten the length of your current loan? It might be possible by refinancing at a lower interest rate, especially if you’re ok paying the same or more each month.
- Do you currently have an adjustable-rate mortgage (ARM)? If so, refinancing into a fixed-rate mortgage might be right for you. As interest rates start to rise again, your current ARM payment may start to increase to levels that you’re uncomfortable with.
- Do you have any major home projects you want to accomplish? If so, you could consider a cash-out refinance. You’ll gain access to some of the equity in your home to be able to tackle those much-needed renovations. Each state has specific rules regarding cash-out refinances, so be sure to ask your lender.
If you want a second opinion on whether refinancing your home is right for you, please contact us! We’re here to help!