Over the last few months the race has been on to refinance home loans. If you’ve never done a refi you might wonder what the big deal is about them. Here are a few big reasons why people are taking advantage of these historically low rates.
Dropping the interest rate on their loan. Rates are so low right now that many people can shave at least a full point off of their home loan rate. If you’re planning on staying in your home for at least five years a refi could save you thousands of dollars over the life of the loan. Lowering your rate may also be an opportunity to reduce the term of your loan. Reducing your rate and keeping the same payment equals less years to pay, and less interest paid in total.
Dropping your monthly payment. Putting money back in your wallet every month can help make budgeting much easier. With current low rates it’s even easier to drop the amount of your monthly payment so you have money left for other things. Maybe paying down higher interest rate credit cards. Or something more immediate like a set of braces or college expenses.
Consolidating higher interest rate debt. If you’ve built up some equity in your home you might take some of it out to pay off higher interest debt like credit cards or medical bills. You might also plow that money back into your home by improving it or adding on. Need an extra bathroom now that the kids are getting older? Maybe you could really use a separate space for a dedicated home office? Whatever your need, cashing out some of your home equity can be a great way to make it happen.
Is a home loan refinance right for you? Amy Clark is your home loan expert at PCCU, email or call her today at 765-960-8618. She’ll give you the facts and help you decide if a home loan refinance is right for you!