According to Freddie Mac, rates for a 30-year mortgage are averaging 3.84% as of June 21, 2019, down sharply from 4.57% a year ago. Here are 5 reasons why you should consider refinancing your mortgage:
Your current rate is higher than the current market rate.
This is the number one reason you should refinance your rate. The general rule of thumb is if your current rate is 1 point or more higher than the current market rate, it could be time to refinance depending on your situation. A single percentage point can cost thousands of dollars a year in interest.
You want to get rid of Mortgage Insurance (MI or PMI).
Mortgage insurance applies to a loan when its loan-to-value (LTV) is higher than 80%. If you have a conventional loan, the mortgage insurance should cancel after the LTV reaches 78%. If you have an FHA loan and put less than 10% down, then you will have mortgage insurance for the life of the loan
You have an adjustable-rate mortgage.
With current fixed rates being so low, it may be time to secure that low fixed rate now instead of letting your current rate adjust.
You want to lower your monthly payment.
A refinance can help lower your monthly payment, not only by reducing your interest rate, but it can also stretch the loan payments over a longer-term.
You want to make home improvements or repairs.
You can borrow up to 80% of the value of your home. Cash-out refinances allow homeowners to access some of the equity in their home to make improvements or repairs.
Refinancing isn’t free, there are closing costs associated with a mortgage refinance. Refinancing can offer a tangible net benefit that could save you money even after factoring in the fees. To see if refinancing is a good idea for you, call us at 972-334-0700 or come in and talk to one of our mortgage experts today.