If you’ve been thinking about refinancing your mortgage, here’s a big question for you: What are you waiting for?
With the interest rates currently at the lowest level they’ve been in over a year, now may be the best time to take advantage of those low rates by refinancing.
Here are a few questions many people have about refinancing:
Does it make sense for me to refinance? If the interest rate on your mortgage is higher than the current interest rate, it probably makes sense to refinance. Of course, there are other factors you’ll need to consider—what type of loan you have, how much lower the rates are, how much you’ll save by refinancing, etc.—but if today’s rates are lower than the rate on your current loan, you should definitely talk to your mortgage professional.
Can I get cash out by refinancing? In many situations, you can do what is called a cash-out refinance. Basically, a cash-out refinance is when you refinance your existing mortgage into a new one while keeping the difference in cash. For example, if you have $100,000 left on your mortgage and your home is worth $200,000, you might decide to refinance for $150,000. You will then be left with $50,000 in cash.
Can I do a refinance to fund my home improvement project? Refinancing to fund a remodeling project is one of the most common reasons homeowners refinance. Doing a cash-out refinance is an excellent option to use home equity and funnel those funds back into your home. By using your refinance funds for renovation purposes, you’re essentially using your mortgage to increase your home’s value.
Are there other reasons to refinance? Yes, you can refinance for a number of different reasons. With a refinance, you can convert an adjustable-rate mortgage into a fixed-rate mortgage, change the term (length) of your loan or remove the private mortgage insurance requirement on your current mortgage. With the low rates, it may be the best time to choose one of these options—and save money at the same time.
Can I refinance if I’m buying in the near future? Although refinancing obviously doesn’t make sense if you’re getting ready to buy, it can make sense if your new home purchase is a little bit farther out on the horizon. If you know you’re going to be moving in a year or two, you can refinance your current mortgage and take advantage of the lower rates up until you buy a new home.
Keep in mind that your ability to refinance will depend on several factors such as your credit score, the amount of home equity you’ve built up, and/or your current loan-to-value ratio. Your best bet is to get in touch with your mortgage professional to see if refinancing is a good option.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.
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