By Jason Holtman
Most of you have seen the news, read social media posts, or even found it in one of our newsletters…mortgage rates are low!! The lowest we have ever seen, actually. That absolutely has an effect on home buyers and sellers and the overall housing market. But what if you don’t want to move and want to stay in your home? Maybe it’s time to refinance?
There are many schools of thought about refinancing your mortgage. Many calculations need to be made to see if its the right thing to do financially. Consulting with a trusted mortgage advisor is step one, in my opinion. Asking yourself “how long do we plan on staying here?” and “Do we want a 15, 20, or 30 year mortgage moving forward?” are two major questions to ask. The overall difference in interest rate and total closing costs are the biggest factors in determining the direction you go and if it’s the best decision for you to make, but there could be another bonus…PMI.
If your initial downpayment on your home was less that 20%, chances are you are paying some sort of Private Mortgage Insurance, or PMI. It’s an additional cost to you in your monthly payment on your mortgage. Did you know that refinancing could potentially reduce or eliminate those PMI payments?!
With the surge in home values over the last 5 or so years, your home has most likely gone up significantly in value. This also means you have more equity in your home, therefore meaning you possibly have close to or more than 20% equity in your home. That’s even if you put 3%, 5%, 10%, or even 0% down on your home when you purchased it. You probably have to get an appraisal to find out, and one of the best ways to do that is through refinancing.
So, bottom line, refinancing can be worth it in order to lower your interest rate and reduce your monthly payment (or even years off your loan), but it could also have another bonus with getting rid of PMI in the process. Please reach out to our Team if you have any questions or want potential lender contacts…we are always here to help!