Refinancing when the time is right can be a great strategic move; one that can help you save thousands upon thousands of dollars over the life of your loan. But how do you know if it’s a good time to refinance? That’s exactly what we’ll explore in today’s article from Sonia Krietz, lending professional.
One point for consideration: your personal finances and your credit score. If your credit score has increased since you obtained your fixed rate home loan, then you may be eligible for a much lower interest rate; one that can help you save significantly on your monthly payment. You can also pull out a bit of extra money, drawing against your home’s equity. This can be a great option for funding home improvements, paying off high interest credit cards, or simply putting aside a bit of money in an “emergency fund.”
Of course, you must consider your current economic situation, your credit score and the current terms of your home loan relative to the fees that will be incurred during the refinancing process.
Taxpayers will also need to remember that by lowering your interest rate, you lower the potential interest-based tax deduction that you’ll be eligible to claim. So that’s yet another important consideration to weigh as you determine whether refinancing now is the right move for you and your family.
Another major point for consideration is the national and the worldwide economy, as it’s the economy that determines the “going rate” in terms of interest. During times of inflation, the Federal Reserve raises interest rates, while during times of slow economic activity, the Fed will lower interest rates in an attempt to stimulate borrowing (and thus, spending).
Currently, the Fed is expected to raise interest rates some time before the end of 2015, so those who are seriously considering refinancing may wish to take action soon.
If you’re ready to get a home loan, wish to refinance or require help getting on the path to home ownership, contact Sonia Krietz, with Security National Mortgage Company.
You may wish to complete the pre-application form and Sonia will be in touch to help you proceed through the process. If you have any questions or concerns, you can also contact Sonia Krietz by phone at 916.385.9716.