Shopping Around for a Better Deal
If you have a fixed-rate term and it’s about to expire, it’s a good time to look at refinancing. You might be able to get a better rate, which can decrease your monthly payments or shorten the term of your loan. Either way, why not save the extra interest payments to put toward your own savings or use how you see fit?
Cash Incentives To Refinance
This is a great goal and a frugal one. If you refinance for a shorter term, it will mean that you’ll pay off your mortgage sooner. You’ll need to look at what the interest rate is and what the new monthly payment will be to set a time frame that you can afford. With the lower interest rates, you may be able to keep a comparable monthly payment amount, while taking years off of your loan. Don’t forget to add up the savings over the entirety of the loan. The savings over time can be thousands or tens of thousands of dollars.
To Take Advantage of Lower Interest Rates.
A lot of educated homeowners refinance when interest rates are low simply to take advantage of that savings. You might choose a shorter loan period because the rates allow it. But overall, you may just want to refinance before the rates go up again.
To Access Equity.
Home values have increased dramatically, which means you probably own a lot more equity in your house than you’ve paid in. It might be to your advantage do a cash out refinance. With a good interest rate an loan terms, you may be able to keep a comparable monthly payment. The lump-sum you take out from the home can be used to invest in something with higher earning potential or to invest in another property.
