For many people, the thought of refinancing their home turns their stomach. Having an appraiser in to check your HVAC system, etc., always adds a bit of uncertainty and the potential for repair costs. What many people don’t realize, though, is that you really can save yourself some money by refinancing smartly.
Benefits of Refinancing Your Home
Although there are many reasons why you should refinance your mortgage, lower month-to-month payments are the main lure.
Another option to save money on your mortgage payments is to change the type of mortgage you have. Consider switching to an ARM (adjustable rate mortgage) with a low introductory interest rate. If you need to, you can always refinance down the road. This is a quick way to help with the short-term, month-to-month payments.
When you’re considering whether or not you should refinance, ask yourself the following questions:
- How much longer are you planning on staying in your home?
- Will refinancing reduce your interest rate by at least 2%?
If you’re planning on moving soon, don’t bother refinancing. However, if you’re sticking around, you should definitely research your options and see if you can reduce your interest rate by 2%.
Personally, I do a 10-year ARM, and I’ve been doing such for over 20 years. I’ve jumped from ARM to ARM, I refinance, and I keep up with the times so that I stick to lower payments.
Considerations for Refinancing Your Home
Recently during the pandemic, there have been some opportunities to get a rate readjustment. They’ll readjust your interest rate, and reset the clock on your ARM. If you have an ARM already, it is worth calling your mortgage broker and asking if a readjustment is available to you.
Judith Heft & Associates cannot originate any loans, but we can make sure you have an organized file system to make the process easier. As Financial Concierges we can also offer informal advice and tips we’ve learned over 25 years. For more information, contact us.