With interest rates the lowest they have been in three years, is now the right time for you to refinance your home loan? This question really requires more of a personal decision and only you can decide if it is the right time. If you are don’t plan on living in the home for more than three years, we would recommend against a mortgage refinance. The main reason for this is because the costs you incur may outweigh the benfits. To learn 5 Reasons to Refinance your mortgage in Austin TX,, Round Rock TX, Hutto TX, Leander TX as well as the whole state of Texas contact us today at (512)795-5596.
1. To Improve your Monthly Cash Flow
by refinancing you can lower your monthly payment a few to several hundred dollars and can you this savings for several different things. You can start that savings account you have been talking about since you were in your early 20s, you can apply this towards credit debt or you can even use this saving for family fun time. For what every reason you decide this is a great reason to refinance your home mortgage.
2. Home Improvement
You can refinance your mortgage and gain access to the equity that is in your home to do those every few years repairs. This type of loan is referred to as a cash out loan. with the massive amount of appreciation in the homes in the Austin Area and really all over Texas your home has a monetary value that you cannot access until you sell it or do a cash our refinance loan.
3. Increase Equity & Pay off the Home Sooner
If you are like me and you want to pay the your home off completely so you are ready for retirement now is the perfect time to refinance your home loan. You can lower the months owed on the home to 15 years or 10 years and your monthly payment may still be less than what you are paying now. This is a huge benefit since your housing expense is your largest expense per month. By paying the home off you have basically given your disposable income a 30% increase since you will no longer have a mortgage payment after refiancing
4. Debt Consolidation
By refinancing your home and paying off your non mortgage debt you will accomplish two things. you will have no more non secured debt and you will increase your monthly cash flow. Non Mortgage debt can be mentally crippling when trying to get ahead in life. Looking at credit card bills knowing the interest rate is 18+% and paying just the minimum payment can be very defeating. a 2000 dollar credit card bill can take up to 5 years to pay off at the minimum payment after paying on this bill for several months and not seeing any significant saving this can have a huge impact on your Psyche and prevent you from being able to save for retirement. This is one of the most important reasons to refinance. Get yourself out of debt and start living your life
5. Removing Private Mortgage Insurance (PMI)
when you buy a home and don’t put 20% down payment you have to pay mortgage insurance. This insurance does nothing for you. It is designed to protect the lender if you foreclose. This payment each month can be several hundred dollars and you see no real benefit. By refinancing and doing an appraisal you reset the value of your home and if your new loan amount is below 80% of the appraised value you won’t have to pay mortgage insurance. Now all the money you pay each month goes towards your home loan and not an insurance to protect the lender.
Refinance Your Mortgage Today !
If you have any questions about the refinancing of your home loan please reach out to me or my team at TeamTroy@snmc.com and we will advise you on if now is a great time to take advantage of the low interest rates and refinance your home loan. Be sure to check out our next blog that will discuss how to qualify for a mortgage refinance. For more information on a mortgage refinance in Austin TX,, Round Rock TX, Hutto TX, Leander TX as well as the whole state of Texas contact us today at (512)795-5596.