What Exactly is a Refinance and Why Should I Consider it?
You may be wondering what a refinance is, and more importantly, whether or not you should consider it. A refinance is the process of paying off your existing mortgage with a new loan. There are many reasons to explore refinancing, including lower interest rates, higher home values, and cashing out your home's equity. For these reasons and others, we recommend that homeowners explore their options when considering a refinance. Let's look at some benefits of refinancing below!
Lowering your interest rate
The interest rate on your mortgage is related to the amount of your monthly mortgage payment. Lower interest rates might help lower what you pay each month. A lower rate may also help you pay down the loan balance more quickly. If your credit score has improved or market conditions have changed since your current mortgage, now might be the time to explore current interest rates.
Higher home values and your home's equity
In 2021, higher home values are trending, which means this is a great time to take advantage of your home's equity.
If your current mortgage's loan-to-value was greater than 80% at the time of your mortgage, you might have had certain stipulations to qualify for your loan. For example, sometimes lenders increase your interest rate to cover private mortgage insurance. Refinancing now, might save you some money by removing such stipulations.
If your home's value is significantly higher than the original value, you might be able to qualify for a cash-out refinance. A cash-out refinance allows you to turn the equity in your home to cash! Maybe it's time for a new roof, a pool addition, or sending a child to college. What makes this even better is when rates are low. You might even keep your monthly mortgage payment the same if you can take advantage of a lower interest rate.
What does the future of your mortgage look like? Have you been considering refinancing to get a lower rate or to take advantage of current home values? Our team is ready to talk with you. We'll listen carefully as we discuss whether a refinance is right for you! We have five convenient locations in Milledgeville, Gray and Lake Oconee. We are looking forward to helping you explore your options!
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