“Home refinance” is a term many people hear, but few actually consider. Why should I refinance my home, you might think, when my mortgage payments are perfectly comfortable as they are? There are a number of reasons people turn to refinance. Here are the top three.
- Take Advantage of a Lower Interest Rate.
As of the end of September, home mortgage rates were at a stable low of 3.54%. While that’s not as low as some of the record dips in the past (long-term rates were about 3.31% at the end of 2012, for instance), it’s unlikely that they’ll get any lower for quite some time. The Federal Reserve has held off on raising the interest rate for some time now, but a hike is expected by the end of 2016 or early in 2017. Trade in your old mortgage rate for today’s numbers with a home refinancing and you could save thousands of dollars over the years on interest alone.
- Trade In For Different Types of Mortgages.
The one thing we can always depend on in our lives is change. Perhaps you took on a 30-year loan when you first bought your house, but just a few years in you find yourself with a better job or a windfall of assets. You can refinance a 15-year mortgage instead to pay off the loan faster and save on interest fees. On the other hand, you might also consider swapping fixed rate home loans for adjustable-rate loans, or vice-versa. When circumstances change, you don’t have to necessarily be stuck with the first plan you signed on.
- Tap Into Equity or Consolidate Debt.
Sometimes, of course, financial situations can take a turn for the worse, too. Many people think, “I can refinance my home to pay off my credit card debt.” It’s true that you can tap into your home equity to pay off other large expenses and that you can consolidate your debt by getting a new mortgage, but it’s not always a good idea. In the end, you may only add to your debt problems. Consult with a dependable mortgage loan broker to make sure this will help, and not hurt, your financial situation.
Refinancing can be a smart, money-saving decision, so long as you do it for the right reasons. To learn more about your options, contact us today for more information about current Nashville mortgage rates and refinance rates.