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4 good reasons to refinance

By William Spencer

Mortgage and Lending with US FUNDING GROUP

September 05, 2006 05:44 AM

Four Good Reasons To Refinance

With interest rates fluctuating every week, now is the time to discuss when you should make the decision to refinance.

Normally, homeowners tend to rush refinance the moment they hear interest rates have fallen. Not a bad idea, but if you don't act quickly enough, rates in this market might have risen again before you place your first call to your lender. Also, homeowners sometimes fail to include the lender's fees into their total cost figure. If you're trying to decide when you'll start saving money, it helps to know all the costs involved.

So here are 4 good reasons, in detail, why you should refinance

The No-Cost Refinancing
If you have a fixed-rate loan and can refinance for "no-cost," which means basically that there is a lower rate with no out-of-pocket fees, you should refinance. You may still be able to save money even if you are several years into the loan. If you are, say, just starting year 5 of your loan, the refinance can amortize your loan over 25 years, rather than 30. That way, you are still paying off the loan in the same amount of time. And with the lower balance, you may be saving thousands of dollars in interest over the life of the loan.
Lower Monthly Payment
Reducing your monthly payment can help in many ways. you can take the extra money and start accumulating wealth, you can protect yourself in case of accidents, or losing your job. having control over your money is a key to financial success and lowering your monthly payment helps put more money in your control.
Maintaining Your Tax Advantage
As a person gets closer to paying off their mortgage they generally start losing their tax advantage. The worst part about this is that they are generally at that point making more income than ever. Refinancing and keeping your mortgage as long as possible is a huge benefit in tax savings.
The Cash-Out Refinance
When you refinance your home you can get a new loan that is higher than your current loan and take the difference as cash in your pocket. Generally people do not do this because the payment goes up. The most important thing when cashing out is what you are going to do with the money. Taking your equity and investing it is one of the fastest ways to financial success. Getting the right mortgage strategy when cashing out is essential to help with the higher payments you will incur.

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Fred Griffin Florida Real Estate

Fred Griffin Real Estate - Tallahassee, FL

Licensed Florida Real Estate Broker

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Nov 14, 2015 11:24 AM

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William Spencer

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