Thinking about refinancing? Here are some important things to consider

Jeff Appel Reporting

Why refinance your mortgage?
• Reduce interest rate, which will in turn lower your monthly payments
• Reduce the term of your mortgage, so you can pay it off faster
• Switch from an adjustable rate payment to a fixed payment, for greater flexibility
• Access the equity in your home for large expenditures
• Consolidate other high-interest rate debt into one lower monthly payment

When should you refinance?
• If the current market rate is more than one-half percent lower than the rate on your mortgage AND you are planning to stay in the home for at least 2 or more years depending on the transaction costs. You want to be sure you are able to at least recover these costs in your accumulated monthly savings.
• If you have an ARM loan and your rate is about to adjust to a higher monthly payment
• If you need cash for home improvements, college tuition or any other major expense
• If your interest-only payment is about to convert to a fully amortizing payment

Homeowners who refinance their mortgage can often save hundreds of dollars each month, and thousands over the life of the loan, simply by changing the rate or term of their loan. Homeowners who consolidate their debt by refinancing can also see significant savings each month as well as a greater tax benefit. In most cases, normal closing costs will apply so be sure to consult with a loan officer to be sure that refinancing is right for you.