As we start to see interest rates drop, people are starting to talk about refinancing. For some, the rate may not drop a lot, but what is your financial situation? Do you have a lot of equity in your home? Do you have a home equity loan with a higher interest rate? Do you have a lot of credit card debt? Did you buy a home in the last year or two using a temporary buy down?
The answers to these questions can help you decide whether it’s time to look at refinancing. I have talked with clients that have a lot of credit card debt with interest rates in the 20’s – maybe it’s time to use some equity to pay off that debt. The key is to not charge up the credit cards again. Maybe you have a home equity line that is over 8 or 9%, you may be able to combine that with your current mortgage and lower your payment. Remember that as the Fed starts to drop interest rates, the rate on your HELOC will also drop.
Are you thinking about doing some improvements to your home? It may be worth looking at doing a cash out refi to pay for the improvements.
For some a refinance may eliminate mortgage insurance if your home appraises for enough. If you bought a home with a temporary buy down, the interest rates are adjusting and it may be worth while looking at a refi to lower the rate. Or maybe your buydown is going to adjust in the next few months so a refi would keep the rate where it is now.
As you think about these areas, feel free to call to talk about your options and whether or not it makes sense to look at refinancing now. If not, we can keep in touch and as rates do drop (we hope!), once they get down far enough, we can connect again to look at refinancing. Just something to think about!
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
