When home mortgage rates are still historically low, it’s an ideal time to consider the ways you can use this time to your advantage. Here are eight most advantageous reasons for you to consider a refinance.
- Lower Your Monthly Payments
Our home mortgage payments are usually the biggest expense in our monthly budgets. Sometimes lowering our monthly payment by even a small amount can allow us to move money into another category in our monthly budget – like an increase in a power or water bill. It might even allow for a new car payment! - Lower Your Interest Rate
When rates are still at historically low levels, it’s always smart to meet with a mortgage banker and determine if you can save money. Depending on your current interest rate you may be able to lower your interest rate which will save you money over the life of your loan. - Move into a Fixed Rate
If you are in an adjustable rate loan (ARM), it’s always wise to meet with a mortgage banker to determine if now is the time to move into a fixed rate loan instead of an adjustable rate product. Typically ARMs are great products when first purchasing your home because the payments are oftentimes lower. With historically low interest rates today, it could pay off for you to refinance into a fixed rate. - Change the Terms of your Fixed Rate
If you are currently in a longer-term mortgage like a 30-year or 20- year mortgage, you’ll want to meet with a mortgage banker to see how much you can save by refinancing into a shorter-term mortgage, like a 15-year mortgage. Depending on your current rate, your monthly payments might be similar, while you will own your home that much quicker saving you a lot of interest over the term of the loan.At the same time, if you currently have a shorter-term mortgage and your lifestyle has changed somewhat, like you started your own business or took a different job, oftentimes people will refinance into a longer-term mortgage just for some peace of mind. Your term will be longer so you will pay more interest over the long term. However, your monthly payments will be less. - Get Cash Out for Remodeling
Remodeling has become one of our most popular activities today. However, if you are like most of us – there is never enough money to do everything we want to do. So refinancing with cash out is often an option to consider when interest rates are historically low. Keep in mind with a cash-out refinance – the interest rate may be higher. But again, now is the time to at least meet with a mortgage banker and consider this option when rates are this low. - Get Cash Out for Debt Consolidation
Our global pandemic has left many of us with accumulated debt either from loss of income, more reliance on credit cards and perhaps unforeseen medical bills. With interest rates this low, you’ll want to talk with a mortgage banker to determine if a cash-out refinance to consolidate your debt is a wise option for you. You can roll your debt into your mortgage and have one monthly payment. The caution with this cash-out refinance is that you don’t incur additional debt, so you continue to have one monthly affordable payment going forward. - Remove Private Mortgage Insurance (PMI)
Private mortgage insurance (PMI) is what many first-time homebuyers will pay when they don’t have a big down payment on their home. However, once you have lived in your home for a while, you’ll usually gain more equity in your home. Therefore, you’ll want to check with your mortgage banker to determine if you can refinance into a new mortgage without PMI. Once you can eliminate PMI, you will most likely have smaller monthly payments and save money over the life of your loan. - Consider a Combination of the Above!
Any one of the above advantages, or a combination of them, are great reasons to refinance in today’s environment. You can potentially save money up front, over time or simply have more peace of mind. Your mortgage banker will discuss your options and give you a complete analysis whether you choose to simply refinance to save money, take cash out, remodel, consolidate debt, or all the above. Now is the time to consider your advantages!
Talk to Your Mortgage Banker Today
Whether your first mortgage is with KCSB or not, your mortgage bankers at KCSB are happy to review your options so you can determine your best advantage. They are experienced, local and can look at your financial picture to give you the options to fit your lifestyle, goals and budget. Call today at 269.679.5291 or visit online at https://kcsbank.com/mortgages/.
Kalamazoo County State Bank is an Equal Housing Lender.
