|Benefits of Refinancing your Home Loan
Time to Refi ?
Buying your home to begin with was probably a complex transaction. There was a lot of
paperwork, a lot of anxiety, an avalanche of details involved in packing, moving, closing,
unpacking. When you think about refinancing, you might remember those headaches and
forget the idea. But there are a lot of reasons you might want to give it careful thought. Not
only is loan processing much quicker and easier these days, but you may serve a lot of other
very individual purposes as well. Consider the following:
Refinancing may put money back in your pocket every month
If rates are lower now than when you originally financed your home, or if you choose an
adjustable rate mortgage with a lower initial interest rate than your current rate, your monthly
payment will go down (assuming you don't shorten the term or increase the loan balance
significantly). That means you can save more every month or afford those dance lessons or
dinners out or new suit you've had your eye on. Not only that, but you probably won't have to
scrape together money to bring to the closing table either, because you can usually include
all of the costs to close your loan in the new loan amount.
Refinancing may put a lot of money in your hands today
If you have significant equity in your house, you could get a cash-out refinance and walk
away from the closing table not only with a new loan but with a large amount of money to
invest or to use for a once in a lifetime opportunity - like an extensive vacation, college, home
improvements or the purchase of a boat or anything else you've been dreaming of all your
Refinancing may give you a good night's sleep
If you have an adjustable rate mortgage and the worry over the direction of interest rates has
been keeping you up at nights, you could refinance into a fixed rate and stop all of that
tossing and turning.
Refinancing may help you get organized
Maybe what you really need is to get control over all of the different charge cards and
personal debt that has sprung up around you - and like the idea that you may end up with a
tax advantage by doing so. Ask your tax advisor to be certain. You could refinance your
home, use some of the proceeds to consolidate your debt and just make one convenient,
low-interest payment every month.
Refinancing may get you out of debt faster!
Refinancing your current loan to a fifteen year or a bi-weekly loan may be possible without
even raising the payment significantly, particularly if rates were high when you first bought.
You could save thousands and thousands in interest and own your home many years before
you would with a standard 30 year loan.
Refinance to Pay Off Credit Cards And Other Debt
The difference between credit card debt and a mortgage can, financially speaking, mean
thousands of dollars. Why? Credit card debt is compounded where the interest on a
mortgage is simple, and often tax deductible. Using the equity in your home rather than credit
cards to finance expensive purchases can save you money paid in interest in the long run.
Be sure to consult your tax advisor.
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