7 Reasons To Refinance Your Mortgage Right Now
Thinking about refinancing your mortgage, but not sure if that is the right decision yet? We have seen lower rates in this current housing market, and you may be wondering if you should wait until next year. But, in July, the economic research team from Freddie Mac published its latest quarterly forecast for the mortgage industry and housing market. Among other things, they predicted that mortgage rates in the U.S. would gradually rise through the end of this year and into 2022. Specifically, their mortgage rate forecast for 2022 predicted that the average rate for a 30-year fixed home loan would rise to around 3.8% by the end of 2022, making this the perfect time to refinance your home. Here are seven great reasons why you should refinance your mortgage right now!
1. Reduce Your Interest Rate:
When rates drop, you can reduce your monthly mortgage payment, saving more money over your loan term.
2. Shorten Your Loan Term:
Many homeowners start with a 30-year mortgage. You can refinance your mortgage into a 15 or 10-year mortgage, depending on your situation. Both of these options dramatically reduce the amount of interest you pay.
3. Pay Your Debts:
If you have a large amount of debt from credit cards, student loans, or car debt, this may be the perfect opportunity to pay off debts with a cash-out refinance. It is considered the best practice to pay down high-interest debt first, when possible.
4. Take Advantage Of Your Home’s Equity And Pull Cash Out:
Home values have never been higher than today. In the Sacramento region, 34% of homeowners have hit the “equity rich” mark, up from 27.5% the year before. Sacramento, Placer, El Dorado, and Yolo counties have the 13th highest percentage of “equity rich” owners among the 108 largest metro areas in the country. You can do a cash-out refinance to take advantage of your home’s equity.
5. Home Renovation:
If you have been wanting a new kitchen, bathroom, or another large remodel in your home, this would be the perfect time to do so. Taking advantage of your current home’s equity is a great way to finance these renovations.
6. Eliminate Or Reduce Your Mortgage Insurance:
Many homeowners pay mortgage insurance because they didn’t have enough money to put down when they bought their homes. Although many homeowners can request to get rid of their mortgage insurance once they have enough equity, those with Federal Housing Authority “FHA” loans made within the past few years cannot.
If your FHA loan was funded any time after January 2013, you cannot eliminate your FHA mortgage insurance premiums, no matter how much equity you have in your home. The only way to eliminate it is to refinance your home into a conventional mortgage.
You Want To Save More For Retirement:
If you are falling behind on your retirement savings, you may want to use the savings from your refinance to make contributions to your 401 K, these contributions are not taxed, and if your employer matches your contribution, you will save double.
With low mortgage rates and so many refinancing options available, you may want to know if this is a good option for you. Get in touch with us, and we can discuss your mortgage situation or schedule a consultation using the button below or the QR code. My team and I look forward to hearing from you.
“By refinancing your existing loan, the total finance charges may be higher over the life of the loan”
© 2021 Premier Mortgage Resources, LLC (“PMR”) | NMLS #1169 | Equal Housing Opportunity | PMR is not affiliated with or an agency of the federal government. All information contained herein is for informational purposes only and, while every effort has been made to ensure accuracy, no guarantee is expressed or implied. Any programs shown do not demonstrate all options or pricing structures. Rates, terms, programs, and underwriting policies are subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans are subject to underwriting approval. Some products may not be available in all states and restrictions apply. PMR is licensed in AL; AZ – BK #0937529; CA – Licensed by the Department of Financial Protection and Innovation, under the California Residential Mortgage Lending Act; CO; FL; HI; ID; IL; KS; MD; MN; MT; MO; NV; OR; SC; TN; UT; WA; and WY. Not all branches or MLOs are licensed in all states.