A rate and term refinance is a simple and easy way to save money on your monthly mortgage payments. If current market rates are lower than the interest rate on your home, refinancing into a lower rate is a great way to save. It’s that simple. Apply for a lower rate, close in less than 3 weeks, and keep more money in your pocket.
Refinancing into a longer term is another way to save on your monthly mortgage payments.
Take Cash Out
A Cash-out Refinance is a great way to access your untapped equity in your home. Many homeowners don’t realize that they are sitting on a large pile of cash. Refinancing into a mortgage at a higher loan amount than what you currently owe allows you to keep the difference. For example, if your house is worth $500,000 and you owe $200,000 on your current mortgage, you are sitting on $300,000 of untapped equity. You decided you would like to access some equity to help pay for college, buy a new boat, an investment opportunity, or whatever it may be. So, you refinance into a new mortgage worth $400,000 and you receive a check at closing worth $200,000 tax free minus closing costs.
Debt is debt. Whether it is on your home, credit cards, student loans, auto loans, etc. One of the best ways to manage your debt is to consolidate it with a cash-out refinance. We see many people with overwhelming amounts of debts who don’t take the time to properly manage it. Every month, they just pay their bills because they think they have to instead of considering a more cost-effective option.
Typically, the most cost-effective option is wrapping all their high interest debt into a home mortgage. Mortgage financing offers the lowest interest rates of any financing because the loan is secured by your home. Student loans, personal loans and credit cards are “unsecured”, therefore have higher interest rates. When you wrap all your unsecured debts into your mortgage, you dramatically reduce your overall interest rate on your debt and save a substantial amount of money per month.
Call your trusted mortgage professional today to learn how much you can be saving this month!
Cash-out one last time before retirement
If you plan to retire soon, consider taking cash out one last time before retirement. You need income to qualify for a mortgage. Some people can qualify using income from pensions, retirement and social security. However, if that income is not enough to qualify for a mortgage or live a realistic and comfortable retirement, then refinance while you are still working. Previous generations were fixated on paying off their mortgage before retirement. Their goals were to eliminate their debt. The downside of that is you end up sitting on an asset and the only way to liquify that asset is to sell your house. However, that school of thought is changing. Now many advisors recommend focusing on maximizing your wealth instead of eliminating your debt to ensure you won’t be house rich and cash poor. Refinancing give you the ability to stay in your home and put your hard-earned money in your pocket to enjoy your retirement.