Right now you’re asking yourself, “should I refinance?”
With mortgage rates lingering near historic lows, plenty of homeowners are wondering the same thing. One of the best reasons to refinance is to lower the interest rate on your existing loan. Historically, the rule of thumb is that refinancing is a good idea if you can reduce your interest rate by at least 1%. However, many lenders say .5% savings is enough of an incentive to refinance.
A study earlier this year showed that almost twelve million homeowners stood to refinance into a 0.75% lower rate — which could mean tens of thousands in long-term savings.
Keep in mind, savings will vary greatly from person to person, depending on how long they’ve been in their current mortgage, what their current rate is, and the rate they qualify for. So, how do you know when it’s the right time to refinance your own mortgage? Here are a few ways to tell whether you should refinance your home.
Break-even: If savings and closing costs will even out and you’ll start seeing returns while you’re still living in the home
Free up some cash: If you can refinance into a lower payment and get a lower payment
Reduce your term: If you can reduce your term and interest rate, you can pay off your loan faster, saving you lots of interest along the way.
Start by clearly defining your goals. Know what your financial objective is, and how a refinance will help you get there.
To check refinance rates available to you, contact us below!