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Refinancing your home is an appealing thought if it can help you save money or take cash out. Many homeowners will consider refinancing to lower their interest rate, shorten their loan term, switch from adjustable to fixed-rate, or get cash out against their equity. But when is the best time for refinancing your mortgage? Here’s what you should consider.
The only good time to refinance is when it will save you money. When you refinance your mortgage, you pay off your original loan and replace it with a whole new loan. So refinancing is only beneficial if it saves you money in the short or long term. Also, remember that there are costs associated with refinancing your mortgage, including application fees, title search, and home appraisal, so consider those when doing the math.
Even if mortgage interest rates have gone up, if you have an excessive amount of debt, sometimes a refinance can save you money. If the interest rate on a new mortgage loan is low enough and your debt is high enough, you can save significantly on the amount you’ll pay over time on your credit card interest – something to consider when looking at a refi for debt consolidation.
If your interest rates keep going up due to an adjustable-rate mortgage, you could save money in the long term by refinancing to a fixed rate. In addition, as mortgage rates rise, having a fixed rate can also give you peace of mind as you know what to expect for your monthly housing costs.
Do you still have questions when it comes to refinancing your home? With mortgage calculators, loan programs that work for you, and years of experience, our team has the knowledge you need to help you make an informed decision. Contact Midland Mortgage Corporation today to find out more.