With national mortgages rates at historic lows, people are considering the option to refinance. Let us tell you why people around the country are refinancing their homes right now and saving money on their monthly payment.
Refinancing is an option that homeowners look at their mortgage to see if they can get a lower monthly payment. In 2020, our borrowers who completed a rate and term refinance with a 30-year term saved on average about $339 per month. You may ask yourself what is that? Simply put, a rate and term refinance is when you adjust the interest rate and term of your mortgage while maintaining the original remaining principal amount.
Other options include a cash out refinance. You essentially trade out your current loan for a new one, but you can take out the monetary difference between the two loans in cash. This option is appealing to homeowners because they can put this money toward a financial goal.
Mortgage rates are changing all of the time, but they have been consistently low over the last few months as the market has struggled. Rates are in the two’s to be exact! This means that homeowners have the opportunity to examine options available to them to see if they can get a lower rate. If you can get a lower payment, think about the money that you can save or direct toward another financial goal.
A question you should ask yourself, as you consider refinancing, is: What would you do with an extra $300 a month, which was only the average in 2020? This is Here are some different things that you could do with the money you saved on your mortgage payment.
Consolidate your debt
One way to use the money is to consolidate your debt, which can raise your credit score. You can pay off your credit card debt, student loan debt, and any other obligations you may have right now. If you take care of the debt now, you should have more money for the things you want in the long run.
Go on a family vacation
The current global health crisis that we are living through has caused certain changes in our day to day lives. Travelling may not look the same for us especially with certain countries placing restrictions on tourist travel. However, there are ways to get around this. You can take a solo or family vacation into the woods. The benefits of this includes fresh air, activities like fishing and hunting, and getting away from the busy city life. You work hard. You deserve a moment to unwind every now and then.
Another vacation related thing you can do is plan for one. Let’s say you have the money you need for the vacation you want right now, but the country has travel restrictions. You can save money to take the vacation you want when the country you want to visit is open to visitors.
Purchase a new car
Aside from a house, one of the other biggest purchases you’ll make in your life is a car. There are nice sports cars, affordable family vehicles and sustainable, electric cars. Everyone’s dream life looks a little bit different. A cash out refinance could potentially supply a person with the funds to buy a new car.
Do home improvement projects
With the money you could receive from a cash out refinance, it could go towards home improvements. You can use it to buy the new refrigerator you’ve been eyeing or complete that new fence project you’ve put off for months. You could even upgrade your laundry game with a new washer and dryer. Home improvement projects take time, patience and a little extra cash to make it happen. A cash out refinance could be just what you need to update your home. Making sure your home it up to date is also important when it comes to selling your home.
Buying a home is only the first step in your life as a homeowner. It is up to you to keep climbing to get the best mortgage. We can help you refinance in as little as 14 days. Our excellent customer service will keep you informed and confident every step of the way. Our streamlined process takes care of the refinance process from start to finish. Give us a call today!
The Home Loan Expert
