You got a mortgage and bought a home. Between keeping the yard mowed, setting up smart home devices, maintaining gutters and all the other responsibilities that come with being a homeowner, refinancing may have never crossed your mind. Is it the right move for you? Let’s discuss.
What is refinancing?
Refinancing is the process by which a homeowner can access a new mortgage with customizable terms. As homeowners settle into their mortgages, their wants, needs and priorities can change. Maybe you need to lower your monthly payment. Maybe you just don’t like the terms of your mortgage anymore. Maybe you need renovations or repairs (yes, refinance can help with that, too). Whatever the reason, refinancing enables the homeowner to adjust their loan to meet their evolving needs. Everything from the length of the loan, to the type of interest rate, to the interest rate itself is negotiable in the refinancing process. And you’re not limited to refinancing with your original lender; Simplist can show you a range of lenders competing to refinance your existing mortgage. In many cases, it can be an upgrade — out with the old mortgage, in with the new, shiny, updated version.
Why should I refinance?
Refinancing could be a good option for you if you’re looking to lower your monthly payment, increase or decrease the length of your loan, or extract cash from your home equity. Additionally, refinancing could prove valuable if you have a variable rate loan and wish to switch to fixed rate for increased stability of, and visibility into, your monthly payments. Need a new roof or a kitchen renovation? Want to pay off that high-interest credit card? Refinancing can allow you to extract up to $250,000 from your home equity to allocate toward big projects or debt consolidation. Once you’ve homed in on your desired outcomes and goals for refinance, you can determine what your new mortgage should look like. For example, if your goal is to lower your monthly payment, you might consider switching from a 15-year fixed mortgage to a 30-year fixed mortgage. Alternatively, if you are looking to pay off your mortgage more quickly and save money over the lifetime of the loan, you might opt to reduce the length of the loan and the interest rate. This process is highly customizable. You’re in the driver’s seat on your refinance journey and Simplist is riding shotgun.
When should I refinance?
Refinancing can be a great financial decision if it lowers your mortgage payment, shortens the term of your loan or helps you build equity in your home more quickly.
When refinancing to a lower interest rate, it’s important to take the costs of refinancing into consideration. If the closing costs outweigh the savings you will get from lower payments, it may not make sense. Closing costs vary state-to-state, and the size of your loan can have an impact on how long it takes for the refinancing to pay for itself.
Ultimately, there are many considerations when deciding to refinance, and you may need to run some back-of-the-envelope numbers to figure out how long it will take you to break even. Of course, Simplist’s experienced mortgage experts are always available to lend an ear throughout the process, to help you assess which financial choices work best for you.
Ready to refinance? Simplist can help.
It can be complicated to figure out whether refinancing makes sense for you and your financial goals. When contemplating this big step, it’s also important to consider your lifestyle needs and goals. Consider how long you plan to stay in your current home, and if you plan to move or relocate in the future. Got refinancing on your mind? Simplist is here to help. We’ve made the process of applying for refinancing stress-free. We show you all your mortgage options from dozens of lenders in one place, then guide you through the process. Reach out today to chat with one of our mortgage experts. We’re ready when you are.