If you’re unsure whether or not refinancing would make sense for you to do, keep reading. Many people think that refinancing isn’t necessary since they already have low mortgage rates; however, refinancing is not just about lowering your rates. There are several benefits in refinancing for homeowners everywhere.
Refinancing can help you plan ahead for your next home or lower overall debt, assuming that we weigh and confirm the financial benefit. Refinancing your mortgage loan can:
- Pay off debt to lower overall payments and total interest
- Lower your monthly payment, where you can use the difference to contribute to your retirement, 401k, or education fund (many times this would lower taxable income)
- Secure down payment for your next home, or future rental property (in order to diversify a retirement plan)
- Get cash for home improvements or repairs
- Refinance from an Adjustable Rate Mortgage or privately held mortgage to a fixed rate
If there is a chance that you may buy a home and move out of yours within the next couple of years, here are two things to consider:
- 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.
- Decide if you will eventually be selling your home or possibly even be keeping it as a rental for help in retirement later on.
Great things to weigh out (as there can be ways to obtain a down payment without selling the home.)
I hope this helps you think about your future finances as well as help you begin taking steps to 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 some improvement.