As a homeowner, you might hear a buzz about refinancing your mortgage when interest rates drop. These opportune moments can save you thousands on your mortgage. Seriously, you don’t want to miss out on the chance to save when it comes around. With rates this low, it might make sense for you to refinance to a lower rate and cut your monthly payment, even if your home loan is only a year old.
So here, we’re sharing some refinance opportunities that can save you thousands.
- Ditch the FHA and Switch to a Conventional. First time homebuyers are drawn to FHA loans because of their low down payment and credit score requirements. But since the FHA requirements are so lax, buyers have to pay a mortgage insurance premium, or MIP, that will set you back a couple hundred dollars a month.
If you purchased your home with an FHA loan, now is the time to consider refinancing to a conventional loan so you can drop that mortgage insurance and save a ton of cash! You don’t want to be stuck with that MIP payment for the life of your loan.
- Cash out Refi. If you already have a decent amount of equity in your home and you could use some cash to do, well, anything you want — renovations around the house, pay college tuition, pay off high-interest credit card debt — why not take advantage of your home’s equity and use the cash to tackle some serious goals? And remember, the interest you pay on a mortgage is tax deductible while the interest you pay on a credit card is not. You can save thousands by scooping up a new, lower rate. 24% interest rate credit card, be gone!
- Go from a 30-year to a 15-year. Think about it: A 30-year mortgage will be paid off in 30 years. A 15-year mortgage will be paid off in 15 years. By switching from a 30-year to a 15-year mortgage, you’re cutting your loan term in half and paying far less interest! And if you take advantage of today’s lower rates, you’ll build up three times the paid equity in half the loan term. It really doesn’t get much better than that.
The market is unpredictable, but we can predict that these low rates won’t last long. Whether you want to drop mortgage insurance, cash out your home’s equity, or shorten your loan term, we can help guide you through the process and save you tons of cash in the long-run. Don’t miss your opportunity to lock in a low rate and save before it’s too late! Talk to a Personal Loan Consultant today.