There are many reasons why refinancing may make sense for you. If the market interest rate is lower than what you are paying, then you may want to refinance to lower the rate, which in turn will lower your monthly payment. If you know that you have a lot of equity in your property, meaning the loan balance on the home is very low compared to the value of the property, then you may be eligible to pull cash out.
You could use the cash for remodeling, sending your kids to college or possible buying another piece of real estate. If you use the money to pay off your credit cards, since the rates on credit cards are much higher than the rate on the mortgage, you could in turn yield a huge savings and actually get on plan to start tackling the balance of your debts. It is also easier to make one payment then a bunch of payments.
I have had requests to
- Refinance for siblings that own a property together and one wants to buy the other one out
- In divorce cases
- In cases when the owner of a property dies and the trust has multiple beneficiaries and we need to buy out others
There are many reasons to refinance. It has to make sense though. You always have to access the monthly, yearly and life of the loan savings with the cost of the loan and ensure you are actually saving money.
For example, if you own a property and have been in the same loan for 10 years and your rate is higher than market rate by lets say 1%. You could refi and lower your monthly payment, but because you have been in the loan for 10 years, most of your payments are going to principal and you are on the fast track to paying off your loan.
If your goal is to pay off your loan, then it is wiser not to refinance because overall you will end up paying less then if you were to refinance. It all depends what your goals are, how old you are and what your income situation is. I always sit with my clients and first try to really understand what their short term and long term goals are. I am then able to guide them in understanding what options they have based on their unique situation that would help them achieve their goals. There are different roads you can take even with loan financing.
Working with an experience mortgage broker who is looking at your best interest is key in getting sound advice. There are sharks out there that are only looking to make money, and are not looking out for your best interest. Make sure that the person you are working with is invested in you. You can do that by seeing if they stayed in the mortgage business during the good and bad times. The good brokers are those who look at their line of work as being their career not an in between job to make a quick buck. I have been in the mortgage business for over 15 years and plan on staying in this business for my life long career. I love helping my clients, their kids and making their dreams a reality.
If you would like to get a FREE consult give me a call 818-565-6212.
My Loan Underwriters, Making your money work you!