Call us so we can help meet your lending needs.

Call us so we can help meet your lending needs.

Should You Refinance?

Should You Refinance?

For many of us, the closing table was confusing and intimidating enough to not want to ever go back. (Side note – this shouldn’t be the case if you closed a loan with us!) There are several beneficial reasons to revisit your loan, and it’s not just for a lower interest rate. Don’t dismiss the possibilities for you before considering these options.

Lower Interest Rate

Let’s start with the most obvious: getting a lower interest rate. In the 1980s, interest rates hit all-time highs with the average a whopping 16%. In the 90’s, they went down to about 8-10%, and in the 2000s, we saw around 5% as the average. In December 2020, rates hit a very low 2.68% for the average 30-year loan. They’re rebounding a bit now, increasing since the covid pandemic began, but rates are still low. If you haven’t taken advantage of the low rates, get in touch with us. The general rule of thumb is if you can reduce your rate by just 1-2%, it’s a good idea to do so. We know many people are reluctant to even call and get some numbers, but there is no pressure from our expert team, and if it’s not advantageous to you we’ll tell you.

Convert from ARM to Fixed-Rate or Vice Versa

If you’re in an adjustable-rate (ARM) mortgage and your rate is higher now than a fixed-rate mortgage, you’ll want to discuss refinancing options. ARMs get a bad rap, but sometimes they can be a wise choice. If interest rates are falling and are predicted to continue or if you’re seriously planning to move in a few years, switching to an ARM can be beneficial. Getting into an ARM mortgage comes with some concerns, but our lenders are honest and truthful and will be able to provide you with the right information so you can determine if this is the right path.

Shorten the Loan Term

A great reason to refinance is to shorten the term of your loan. Right now, rates may be low enough that you can take your 30-year loan to a 20-year or even 15-year option saving you thousands of dollars. Call us and we’ll do the math with you to see how many years you can shave off your loan.

Access Home Equity or Consolidate Debt

This option should not be taken lightly. Refinancing to pay off bills, if not approached wisely, can create a slippery slope of never-ending debt. But there are certainly benefits to this decision. If you want to remodel or build an addition to the home that will add value to it, refinancing to access those funds is a great idea. If you refinance to consolidate debt, you must be honest with yourself and not continue your current spending habits. If you’re in an emergency situation and are committed to not racking up those cards again, this can be helpful. For any concerns, talk to our lenders for guidance.

The bottom line is refinancing can be a great option in many cases, but not all. If you’re curious about your options or just have some questions about refinancing, give us a call.