‘Go’ if the Interest Is ‘Low’?

Interest rates are finally beginning to settle down a bit, much to the relief of many Americans. With lower interest rates, it might be the right time to refinance your home.

How will you know if this is something you should look into?

Refinancing your mortgage can bring many benefits, not just lower interest rates. It can reduce your monthly payments and create shorter payment terms, adding much-needed wiggle room to a tight budget. If you don’t have a tight budget, you can use the newly freed-up funds to create a savings account or dip your toes into the investing world.

Keep in mind, though, that by refinancing, your 30-year term will reset. Despite paying a lower interest rate, you might pay a lot more interest in the long run, especially if you haven’t put much equity into your existing mortgage.

Refinancing to get a lower interest rate can be especially useful for a new mortgage. For example, if you currently have a 7% interest rate but the current rates are at 5%, it might be smart to refinance, especially if it’s a newer mortgage.

A move like this could save you thousands over the lifetime of your loan. (Just remember – you can only play this ‘game’ so many times.)

Market mortgage rates fluctuate daily, so make sure you’re comfortable with the rate before committing to refinance. You may be disappointed if rates continue to drop. (Essentially, get used to the idea that you will likely see lower interest rates at some point in the future – don’t let FOMO consume you.)

As you’ve seen, there are pros and cons to refinancing your mortgage, and if you’re thinking about it, give your decision the care it deserves.

If you’re unsure where you stand and could use professional financial insight, now’s your chance to get answers. Speak with me and set up a convenient time in my online calendar – just click the buttons below.