Homeowners often rush to refinance when interest rates fall. When is a good time to refinance? The best time is when you can save money. Many lenders say that when there's a spread of 2% between the interest rate on your existing mortgage and the new one, this is a good time to refinance. Still, you must consider the costs of refinancing before you decide whether it's right for you.
If you are offered the opportunity to refinance at no cost, make sure there really are no hidden costs and that the interest rate is competitive. Some lenders will offer a no-fee refinance, but they don't offer the best rates.
Many homeowners take advantage of low interest rates to refinance and cash out some of their home's equity to:
* Buy a rental or other investment property
* Remodel their home, such as creating the dream kitchen they've always wanted
* Buy a vacation home on the beach or in the mountains
* Pay for college tuition for a family member or meet other special expenses
* Pay off credit cards or other debts.
Others want to refinance to convert their 30-year loan into a shorter-term loan, such as 15 years, thereby saving thousands of dollars in interest over the life of the loan.
If you would like additional information about the possibility of refinancing your home, or buying additional property, please call or email me. I would be happy to help you.
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