It can be really confusing seeing all the advertisement on refinancing, and perhaps many people wonder if it would make sense. A lot of people have low mortgage rates, however, refinancing is not just about lowering your mortgage rate.
Refinancing to plan ahead for your next home, or to lower overall debt can be good reasons, assuming we weigh and confirm the financial benefit.
Here are some reasons why refinancing your mortgage loan could make sense:
- Pay off debt, to lower overall payments, and total interest
- Lower monthly payment, and use the difference to contribute to Retirement / 401k / Education fund (many times this would lower taxable income)
- Secure down payment for the next future house or rental property (to diversity a retirement plan)
- Get cash for Home improvements or Repairs
- Refinance from an Adjustable Rate Mortgage or privately held mortgage to a Fixed Rate.
How Can You Plan Ahead?
If there is a chance that you may buy a home and move out of yours within the next couple of years, there are some things to consider so we are being proactive.
- While your current home is still your primary residence, it is good to think ahead on financing. There are advantages to this while you are still going to be there for months or a year.
- Will you eventually be selling your home, or keeping it as a rental, for help in retirement? Great things to weigh (as there can be ways to obtain a down payment without selling the home).
I hope that helps to think about your future finances, and to help plan ahead.
Feel free to call or text me so we can go over your financial picture and plan your free annual “financial fitness” chat, and see if anything might need improving.
