Why and when should you refinance your mortgage
Refinancing a mortgage can sound like you’re taking on a lot. But really, there are plenty of solid financial reasons to refinance—perhaps you’re hoping for a lower rate1, or a longer term to help lower your monthly payments. However, you really need to be clear about your financial goals before diving in. And the best person to help you do that is a loan officer who can map out your financial plan and give you insights into things you might not have considered. Now, let’s talk about why you might want to refinance.
Reasons for refinancing:
Take control of your debt
Feeling financially squeezed with monthly bills? A cash-out refinance may get you the money you need to consolidate bills and high-interest charges. A cash-out refinance can be used to consolidate medical bills, credit cards debts and other necessary expenses. Opportunities include:
- Fixed payments: Eliminate differing due dates and various companies you owe to, putting all your loans and debt into one recurring payment.
- Steady interest rates: With the right timing, you could capitalize on market conditions and lower your monthly payment. In general, cash-out refinancing offers lower interest rates than personal loans.
If the assessed value of your house is higher than the principal amount left to pay on your mortgage, you have home equity. Did you know you might be able to refinance into lower rate, take cash out or borrow against the difference with a home equity loan? Opportunities include:
- Rate and term refinance: Lower your rate, change your loan program or both.
- Cash-out refinance: Refinance your current mortgage for more than the amount owed and take the difference in cash. The primary purpose of a cash-out refi is to convert home equity into liquid assets.
- Home equity loan: Receive one-lump sum to be repaid over a fixed term at a fixed interest rate.
Refinance your investment property
If you’re exploring ways to maximize the ROI on your investment property, it could be a good time to consider a cash-out refinance loan. Opportunities include:
- Home improvements to help increase its value (and potentially your rental income)
- Expand your portfolio by purchasing new property
- Fund alternate investment opportunities
If you need cash for renovating your home but don’t have enough equity, you may want to consider a Renovation loan.
Renovation loans asses the home’s value “as-if” the repairs have already been completed, so you can tap into the future equity to improve the efficiency, comfort and value of your home. Our dedicated Renovation Specialists provide a transparent and simple process, while a consultant oversees the project to protect you as a homeowner. Opportunities include:
- FHA 203k: Property can be a single-family home or 2-4 units and must be a primary residence. Ability to make required repairs plus optional improvements. Down payment options as low as 3.5%.
- HomeStyle® Renovation Mortgage: Down payment options as low as 3%. All permanently affixed improvements allowed, including “luxury” improvements. Property can be a primary residence, single-family dwelling, townhome, 1-4 unit multi-family dwelling, second home or single-unit investment property.
Want to know if a refinance is right for you? We know a great place to start.
1 Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Contact Guaranteed Rate, Inc. for current rates. Restrictions apply.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Guaranteed Rate for current rates and for more information.
Guaranteed Rate, Inc. is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture or any other government agency.