With the news focusing on the bad about the pandemic, they’re forgetting one important thing. Bringing you actual news that can help you or benefit you!
For example, interest rates are incredibly low right now. This makes it a prime time to refinance your mortgage.
Refinancing your mortgage is simply getting a new mortgage to replace your old mortgage. When interest rates drop, you are able to save in the short and long run by paying a lower mortgage interest rates. But that is only one reason to refinance your mortgage now.
Here Are 6 Ways You Can Save by Refinancing Today:
6. Lower Interest Rates Means More Money in Your Pocket
If you still have a lot to pay off on your loan, going with a lower rate will save you money because your monthly payments will be lower. This can help make life a bit less stressful if you’re having cash flow issues.
5. Lower Interest Rates With Shorter Deals
- 15 year mortgages are typically around ¼-½ % lower than 30 year mortgages. When refinancing rates are low, like right now, you can likely refinance and choose a shorter loan term and save in the long run.
4. Refinancing to Pay off Debts
- If you refinance and get a lower rate, you may also be able to take cash out.
This cash can be used to pay off debts.
It can clear space on a credit card, reduce the risk of losing expensive items you’re making payments on, and help you with extra cash if you lost a job and need cash.
Bonus tip – If you pay off credit cards at 24% to a lower interest mortgage rate, this strategy can save you a ton of money overall!
3. Refinancing to Make a Needed Purchase
- Just like paying off a debt, you can take the money and use it to buy a car, make an improvement on your home, or even apply it to start a business.
2. Lower Monthly Payments
- Just like in number 6, lower rates may lower your monthly payments and save you money in the long run. This seems duplicate, but it is important so I want to add it again.
1. Putting Cash In to Lower Rates & Payment Intervals
- This may sound weird, but putting cash towards the balance of the loan when refinancing your mortgage can save you money.
Please note that the numbers below do not reflect actual loan amounts. I am using simpler numbers for example purposes only.
Suppose you inherit 50K and owe 125K on your mortgage. If you go to refinance for a lower rate, by putting money in the rate could drop even further. Here is how.
If the rate on the refinanced 125K mortgage is 5%, and the rate on a $75K mortgage is 2.5%, by applying your $50K from the inheritance you could now only have to pay 2.5%.
- By using this money to pay down your balance on the loan (interest free), you can save money in the long run.
As a bonus, did you know that you can choose who does your closing for your refinancing? See, we made sure there are 6 options in this post as promised.
By choosing your own closing company, you can save even more. If you would like a quote from us, email us by clicking here or click here to learn about our closing services and fill out the form on the top of the page.