Why Refi? What it Means to Refinance and Why You Should Look into it
Interest rates, interest rates, interest rates. That seems to be the only thing in the headlines regarding mortgages these days. The TV, radio and internet ads are all telling you NOW IS THE TIME TO REFINANCE! But why? What does it mean to refinance and what do you have to gain? Read on for the many reasons to refinance to see if it really is time for you to take a closer look.
Trade Your Equity for Cash
With increases in home values, the equity you have in your home increases as well. If large expenses are looming in the near future, tapping into that equity may be a good option for you. Things like paying off high interest debt, college tuition or large medical expenses are all great reasons to look at a cash-out refinance. Sure, there are other options to access cash for these expenses, but the low interest rates for mortgages and the possibility of tax deductible mortgage interest make this a very attractive opportunity.
Here is the buzzword of the day again; rates. Say it with me…rates are at historic lows! If you have any doubts that your interest rate is the best it could be, give your Mortgage Consultant a call for a quick mortgage check-up. We are happy to take a look at your current mortgage and see if there is any savings in a refinance for you. This savings could be in the form of a lower monthly payment or in the length or your term. If it turns out that your rate and term are exactly where they should be, no action will be recommended and we will just continue to work with you in the future. Our goal at Cambria Mortgage is to help you along your financial path and to be there when you need us. Checking in every once in a while will help us help you along your journey.
Complete a Renovation
If you look at home magazines and watch HGTV filled with envy, now may be the time to seriously consider a home renovation. With the tight housing market, it is often easier and more cost effective to update your current home into your dream home. One of the best ways to make this happen is with a cash-out refinance. The added bonus to this option is that the completed renovations often further increase the value of your home, creating even more equity for you in the future. Take a look at some great new designs and get inspiration for your remodel at the Cambria Refine + Design blog.
Shorten Your Term
Again, with rates as low as they are, refinancing your home and shortening your term is a great option for a lot of homeowners. Often, with a shorter term you are able to secure an even lower rate than you would see with a traditional 30-year term, which can mean your payments would not go up as much as you may expect. The best way to explore this option is to get in touch with your Cambria Mortgage expert and let them walk you through the numbers. Every situation is different and we want to be sure you are making the best choice for you, both right now and in the future.
Cut Out the PMI
If you purchased your home with less than 20% down, chances are you’re paying private mortgage insurance, also known as PMI. Refinancing will help you eliminate the extra expense if you’ve paid down your loan balance and/or have seen an increase in your home’s value to a point where you have at least 20% equity in your home. That magic number you would look for to be able to eliminate PMI is called loan-to-value (LTV) and it needs to be at 80% or less. To get an idea of where you are at and if eliminating PMI is an option for you, call your Mortgage Consultant and they can run the numbers for you quickly and easily.
Adjust Yourself into a Fixed Rate
Adjustable rate mortgage (ARM) loans are a great way to ease into your mortgage payments, especially if you are a first time buyer or if you need lower payments initially. Eventually, if you decide you will stay in your home longer, you may want to consider refinancing your mortgage into a long term fixed rate loan. Doing so will give you peace of mind, knowing that your rate and payment will not change for a set period of time. With 30-year fixed loan rates as low as they are currently, it is a good time to check in and see if making the change is right for you.
Call Cambria Mortgage
To get started, call Cambria Mortgage at 952-942-0110 or visit CambriaMortgage.com. Our team of experts will provide personal, hometown service with sound advice and impeccable attention to detail at every step of the process.