Should I Refinance? Five Questions to Ask
December brings cold weather, holiday cheer, and as the month goes on, thoughts of a new year and new goals. As holiday spending takes a toll on your bank account (or worse, credit card balances), it may be time to consider options to improve your financial situation.
Refinancing is not a handful of magic beans that will undoubtedly turn one’s financial situation around. Under the right circumstances, though, it can be a useful tool that saves money each month and in the long term. These five questions will help you decide if it might be time to refinance.
- What’s my current interest rate? You’ve heard the news. Interest rates have risen slightly in recent months. Still, they are very low when compared with historical rates, and it is possible that you are paying more in interest than you should be. Consider not only the set interest rates, but also whether your credit scores have improved, which could earn a better rate.
- What are my current loan terms? How much longer do you have left on the loan? Are there prepayment penalties? Are you paying PMI? Do you have an adjustable rate mortgage that could rise? What is my current payment and what would my payment be with a new loan? Yes, there are several questions listed there, but all fall under the category of current loan terms. If your current loan no longer meets your needs, it may be time to refinance.
- What are my long-term goals? Do you need to remodel in order to sell in a few years? Do you need to build equity quickly in order to later pay for college tuition or other anticipated expenses? How can your home and its equity to meet your future goals?
- Do I have debt that is hurting me each month? Consumer debt, such as credit cards, comes with a high price in the form interest and fees. Refinancing to consolidate debt can save hundreds each month, and a great deal more in the long term.
- Am I ready to act in accordance with my goals and plans? While debt consolidation can be a great idea, it backfires when people rack up new credit card debt after refinancing. Sit down with one of our experts and discuss your budget. Determine how you can use a refinance to build your financial future.
The professionals at Vinson Mortgage can tailor a loan to meet your family’s financial needs. We can help you save each month, and since it takes just 8 days to close, we can have your future looking brighter before we ring in 2018!