Is There a Good Time to Refinance Your Home?
While there is a certain stigma attached to refinancing your home, there are certain situations in which it is your best option. It isn't just something people who are struggling financially do. It can be a highly beneficial option to people who are doing fine financially and simply want to save money. If the real estate market has changed since you bought your home (which is highly likely as the market these days is quite volatile), refinancing may be the right option for your mortgage. However, you need to take a close look at your situation and make sure that refinancing is the correct course of action. To learn more about situations in which refinancing is the best choice, read on.
Taking advantage of lower interest rates
Interest rates in the real estate market fluctuate rapidly. Take a look and see if the interest rate at the current market conditions is significantly lower than the interest rate you have on your mortgage. Keep in mind that the interest rates for refinancing are different (and usually lower) than the interest rates for an initial mortgage. If there is what you consider to be a significant difference, call your bank and talk to them about the possibility of refinancing.
Replacing an adjustable-rate mortgage with a fixed loan
In the late 2000s and early 2010s, adjustable-rate mortgages were very popular. They still are popular, although to a lesser extent. Many people find adjustable-rate mortgages to be attractive due to the low initial rates. However, the bank can raise your rates after a certain period. If this happens, you may want to go through a different bank and refinance your adjustable-rate mortgage into a fixed rate mortgage.
Changing the term of your mortgage
Some people get a mortgage and then discover that the monthly payments are too high. There are several things that you can do in this situation. One commonly taken option is to refinance your mortgage for a longer term. If you have a 20 year mortgage, for example, refinancing into a 30 year mortgage will significantly lower your monthly payments. Call your bank to see if you're a candidate for this sort of refinancing.
If you're considering refinancing your home, stop by Citizen's Bank today where a representative will answer any questions you may have.