After becoming a homeowner, there are several reasons why one would opt to refinance; changes in interest rates, the economy, financial goals and even life events all might create a need. Many times your home can help you meet your goals today and well into the future. A homeowner might refinance their mortgage to achieve one or more of these objectives…
When market rates are lower than the present rate on your mortgage, a refinance may translate into hundreds of dollars in monthly savings. Keep in mind that a homeowner may have paid a higher rate on their original mortgage not only because market rates were higher at the time, but also due to other situations such as a lower credit score which is now stronger.
More and more homeowners have come to understand the value of paying off their mortgage early. This is a very important tactic for those who want to use their home as a significant component of their retirement and/or wealth building strategies. McLean can present options that will retire a mortgage in 20, 15 or even 10 years and these options are typically offered at lower rates than the typical 30 year mortgage.
Many times a homeowner must pay mortgage insurance when they purchase a home because they can’t afford a down payment of 20% of the purchase price. Many times a combination of home appreciation with paying down your mortgage over time will put you in position to eliminate your monthly mortgage insurance payment in addition to achieving other objectives through refinancing.
Many new homeowners opt for adjustable rate mortgages (ARMs) when they purchase their homes to achieve a lower payment. Yet there is a long-term risk of rising payments after rates adjust in three to five years. Refinancing at the end of this period allows you to experience the benefit of the adjustable and then return to the safety of a fixed rate – the best of both worlds.
Especially in tough financial times, many homeowners encounter additional financial obligations which can cause even more pressure on a monthly budget. With sufficient equity in your home it may be possible to consolidate these debts and lower your total payments by hundreds if not thousands of dollars per month. Sometimes portions of these savings may be applied to shorten the term of the new mortgage, not only helping you in the short-run, but helping you achieve your long-term financial objectives as well.
The equity in your home can also be used for additional purposes besides consolidating debts. You might use the equity to fund a retirement plan, purchase investment property or pay for a wedding or college. Whatever your need, we will help you make the best decision to achieve your goals.
Making a decision to refinance calls for the consideration of many variables. The term, loan amount, closing costs, rate and the type of mortgage can all be a factor in making the right decision. It is important for you to work with a lender that not only gives you a variety of choices, but has the expertise to help you make the best decision for your financial situation. At McLean Mortgage Corporation, that is where our expertise becomes really important to our customers.