Here’s a bit of good news to kickoff the new year: refinance rates are at historic lows. That means the potential savings—either on monthly payments or over the life of the loan—are bigger than ever. If you’re looking to stretch your monthly budget, or just reduce your payments, now’s the time to refinance.
Refinancing isn’t just for those feeling a pinch in their finances. You could refinance to a 15 year term and pay your home off in half the time, and do it all for less than you would have spent on the old loan. Remember that shortening a term usually results in a higher monthly payment, but if the rate is lower, some of that increase could be mitigated. If you don’t plan to move soon and you want to have your house paid off quicker, now’s the time to hit the gas and speed toward that payoff date.
Now’s also a good time to look into cash-out refinance loans. That’s when you refinance for more than your current loan and take the difference out in cash. It’s often a lower interest way of borrowing large amounts and can be useful for consolidating and paying off debt, or making home improvements. The best part is you repay that cash you took out simply by paying your mortgage every month. It’s just one payment! With rates falling, a cash-out refinance could be a great way to get money you need at a competitive, affordable rate.
These refinance rates are one of the few silver linings recently. Even if you’ve only been in your home for a few years, it’s worth at least looking into. These rates won’t stay like this forever. See if you can save.