What a Loan Refinance Means for Your Bank Account
There are lots of benefits when you refinance loans—particularly in this time of historically low mortgage rates.
By refinancing, you can take advantage of those low rates, lower your monthly mortgage payments, and leverage the equity in your home to put more cash in your pocket or away for a rainy day.
Are you considering refinancing your mortgage loan? Here’s what it could spell for your bank account:
More money in the short term.
The most immediate effect of a refinance is a lower monthly mortgage payment. With a lower rate, you could see your monthly payment lowered hundreds of dollars, putting more money in your pockets to spend as you see fit.
More money the entire time you’re in the home.
A refinance also spells less money spent over the course of your time on the property. A lower mortgage rate means less interest, and that means you can pay down your debt faster—and for less money—in the long run.
More cash to put toward upgrades, renovations, or remodeling.
If you opt for a cash out refinance, you can refinance your loan, while also leveraging the equity you already have in the property. This gives you a quick infusion of cash you can use to improve your home or its surroundings.
More money to pay off debts.
You can also use refinancing as a form of debt consolidation. Just like with renovations and remodeling projects, a cash out refinance can give you funds to pay off debts like credit card balances, student loans, car loans or other high-dollar accounts you have floating around out there.
More money for a rainy day fund or future down payment.
If you’re the saving type, refinancing could simply mean more cash to stow away for retirement or in a rainy day fund. You can also use your extra funds to put aside for a future down payment, should you decide to purchase a move-up home down the line.
Are you wondering to yourself, “should I refinance?” Not sure if refinance loans could help your financial situation? Contact Embrace Home Loans today to find out.