Photo by Autumn Mott on Unsplash
It’s that time of year to bring out the scarves and order up the pumpkin spice lattes. The crisp air and shorter days can only mean one thing – the holidays are just around the corner! Since saving money is always in season, can a refinance of your home help you save up for end of the year holidays and save you from the stress of extra expenses that come with them? Let’s look at the types of refinances that can potentially put or keep money in your wallet.
A cash-out refinance is available for homeowners who currently have enough equity in their home. This option is ideal for those with high balance credit card debt as mortgage rates tend to be much lower than credit card rates. This also simplifies monthly bill paying since these extra debt payments would become part of the refinanced mortgage payment. Just be careful not to rack up the credit card balances again once they are paid off, and you will see an overall savings every month. Anything left over from the amount of the cash-out can be used as reserves for a rainy day or that “Red Ryder Carbine Action 200-shot Range Model air rifle” that you’ve had your eye on.
Many homeowners can also benefit from a rate and term refinance. This is perfect for those with an adjustable rate mortgage (ARM) or a high interest rate. Refinancing to a fixed rate from an ARM offers peace of mind and stability during uncertain economic times because homeowners need not worry about their interest rate increasing as their mortgage payments remain the same throughout the life of the loan. Also, if borrowers have equity racked up in their home and choose not to do a cash-out, a rate and term refinance can help lower monthly payments as the new loan balance would be based off the payoff amount of the current loan. Additionally, rates tend to improve for homes with a lower loan-to-value (LTV) ratio.
If you have thought about refinancing and are wondering if it can benefit you, contact Team Souther today for a free, no-obligation consultation. Our goal is to help you make the most out of home ownership!
© 2017 Marilyn Quindo