Should you consider refinancing in 2019?
January 29 2019
We want every homeowner to understand the impact of refinancing a mortgage, as well as the advantages it can offer your household. When timed correctly, a refinanced loan can lower your interest rate, shrink your monthly payment or even shorten your loan term.
Should you consider refinancing this year? Even if you’re not ready today, it’s good to know when refinancing your home loan makes the most sense. Here are the scenarios to consider:
1. When You Have an Adjustable Rate Mortgage (ARM)
If you have an ARM and the fixed period for your interest rate is about to end, refinancing into a new loan can help you avoid costly rate increases.
2. When Mortgage Rates Are Below Your Current One
If the average mortgage rate is below the rate you’re currently paying, then refinancing can offer significant savings. A lower interest rate drops your monthly payment and decreases the interest you’ll pay over time.
3. When You Want to Pay Off Your Home Sooner
If you’re looking to pay off your loan faster, you can refinance to a shorter-term loan (and make larger payments) to do so. In many cases, a shorter term can also offer a lower interest rate.
4. When You Need More Cash Flow
Cash-out refinancing allows you to turn your home equity into cash, which you can then use toward home repairs, college tuition or any other expense you might have.
The Federal Reserve is expected to increase the federal funds rate multiple times over the next year, meaning mortgage rates may rise as well. If refinancing is something you’re considering, act now to take advantage of the low rates currently being offered. Contact me for more guidance on how to best leverage refinancing.