How do you know that refinancing your mortgage is actually going to help you?
Refinancing your mortgage can be extremely beneficial to some, but to others it can make your house more expensive than it needs to be. How do you know if refinancing your mortgage is going to help or hurt you? There are several things that you should consider before you make your decision, and we’ll be taking you through some of them today. Let’s get started.
Can you get a better interest rate?
One of the best reasons to refinance your mortgage is so that you can improve your current interest rate. In the past, experts said that if you could get anything better than 2%, then it would be worth it. New information suggests that even 1% better interest rates are worth the potential cost of refinancing. This is especially true if you have a very large or lengthy mortgage, meaning that a $500,000 mortgage is going to be more affected than a $100,00 one. Time is one of the biggest factors that can add to your overall costs. After all, you’re going to pay more interest on a loan that lasts 30 years than one that only lasts for 15. Every year brings with it new interest.
Can you shorten the loan’s term?
A shorter term for your loan will result in a lower total sum of interest that you will pay. If you have the opportunity to shorten the term of your loan, then you will end up paying less interest in the long run. Though refinancing usually costs between 3% and 6% of the loan’s principal, a shorter term is worth the investment.
Can you get a better deal?
At the end of the day, refinancing your mortgage is all about getting a better deal for your home. If you think that you can get a more cost effective mortgage repayment system, then you should go for it. However, if you think that you may be moving out of your house in a few years, that you can’t afford higher payments, or your simply aren’t ready, then you should hold off.
Thinking about refinancing your mortgage? Caliver Beach can help!
Whether you’re looking for a house to flip or a home to love, finding the money for this investment can be difficult. We at Caliver Beach are ready to help you find the right loan for your situation. Our team of highly qualified experts have hundreds of options ready for you to invest in the home of your dreams. Contact us today! You can also follow us on Facebook, Twitter, Google+, Pinterest, and Youtube!