What to Consider Before Refinancing Your Mortgage

There are so many reasons why people choose to refinance their home mortgage – some you may already know, and some you may not have thought about.

For example:

To cash out your home’s equity for things like:

  • Consolidating high-interest debt into a lower-interest mortgage payment
  • Finally tackling those home renovations
  • Funding college tuition

Or you may want to:

  • Lock in a lower interest rate, which may lower your monthly mortgage payment.
  • Switch from a 30-year to a 15-year term and pay your mortgage off quicker.
  • Get rid of Private Mortgage Insurance (PMI).

Considering your goal, does it make financial sense?

Well, first, how much equity is in your home? To find out, take your home’s current value and subtract what you owe on it. If your home is currently worth $300k and you owe $175k, you have $125k in equity. And every time you make a mortgage payment, and as home values rise, that number increases.

Also, how long do you plan on staying in your home?

If your five-year plan involves a move, it may not make sense for you to refinance because you have to consider – there are closing costs involved when you refi, and you want to make sure you’re in the home long enough to a.) recoup those costs and b.) get the most value out the savings that follow.

We’re here to answer any questions you may have. Visit https://www.homespiremortgage.com to find a Homespire Loan Officer near you.