Refinancing hit a 20-year-low in 2018 but now more and more people are thinking about refinancing their homes.
While it may take extra effort and paperwork to go through the process, the benefits may outweigh the hassle for you. Continue reading to find out if the benefits of refinancing a home are enough to get you excited!
1. Lower Interest Rate
One of the most common reasons people refinance is to get a lower interest rate. When you get a lower interest rate, you can either pay a lower payment or you can pay your loan back faster. If you pay your loan back faster, you will end up paying less in interest.
Some people choose to keep the lower interest rate and lower payments to have more money throughout the month for other things they need. Other people have enough money throughout the month to pay the extra and want to get out of paying additional interest.
You can use a mortgage calculator if you are not sure how your new interest rate will benefit you. Most people are unaware of how much money they can save by refinancing at an interest rate that is even a couple of points lower.
2. Pay Off Higher Interest Debts
If you have a lot of high-interest credit cards, you could be racking up thousands of dollars in interest on these cards. When you refinance, you may use the money to pay off such high-interest debts.
If you get a 6% interest rate loan to pay off a 28% interest rate loan, you are making a major difference to your bank account.
3. Improve Your Home
When you use the money from your refinance to improve your home, you can improve the value of your home. Before making improvements to your home, know if you plan on selling it.
If you do, you want to make changes that a wide variety of people are going to find appealing. You probably should not go with the pink accent wall if you want to attract a wide variety of buyers.
4. Pay for College Tuition
While you may have had the best intentions, saving for college is not the easiest. Refinancing your home can allow you to get the money you need to pay for college tuition.
Before you try to refinance your home to pay for college tuition, make sure the money you get will be enough for the total you need or if another option may be better.
5. Pay for Unexpected Medical Expenses
Medical expenses can be some of the most challenging. Even a single day in the hospital can derail your finances. Refinancing can help you get the treatment that you need.
Reap the Benefits of Refinancing a Home
Now that you understand the benefits of refinancing a home, it is probably time to go ahead and find the best lender. Use our page to check your loan options or get a fast rate quote.
Also, be sure to keep tabs on our blog for more mortgage news and insights.
We at 7th Level Mortgage are an experienced team of mortgage professionals based out of New Jersey and serving the east coast from Pennsylvania to Florida including Delaware and Maryland. We have won numerous awards for our excellent professional work and reputation with clients for being extremely diligent, accessible and hands-on throughout the entire mortgage process.