Interest rates have fallen again, making 2020 an excellent year to consider purchasing a home or refinancing your mortgage. Just one year ago, the benchmark rate for a 30-year fixed-rate mortgage was 4.68 percent. Currently, the benchmark is situated at 3.86 percent. Interested in exploring the possibility of refinancing to secure a lower rate? Here, I discuss why this could be a smart move for your financial future:
When refinancing makes sense
Refinancing your mortgage is a savvy financial choice in a multitude of situations. For example, if your credit score has improved significantly since you originally qualified for your loan, refinancing may allow you to lock down a better rate. Even a small reduction in your interest rate has the potential to save you thousands over the term of the loan. When you’re considering a traditional refinance, be sure to think about how long you plan to stay in your house. If you’re in it for the long haul, refinancing has the potential to be an excellent financial decision.
Additional refinancing options
There’s more to refinancing than just a lower interest rate. If you have home equity, you may be eligible for a cash-out refinance. In the case of a cash-out refinance, you’ll convert your equity into liquid assets, which can be used for purposes such as debt consolidation or home renovations. If you’re struggling to balance the monthly bills and you’d like to take advantage of the current market conditions, a cash-out refinance can help you pay off high-interest debt and get ahead without unnecessary risk.
For homeowners who haven’t built enough home equity for a cash-out refinance, we have more loan products that may be the right fit for your needs. Renovation refinancing provides individuals with the chance to gain access to cash needed for home improvements, which boosts the future value of the property. FHA 203k and HomeStyle® Renovation Mortgage are unique refinance options to reconsider if you’ve been dreaming of upgrading your house but lack the funds.
Interest rates are at a favorable point right now and are expected to remain stable throughout much of 2020.
By Michaela Phillips. Michaela is the Vice President of Mortgage Lending at Guaranteed Rate, Inc. Contact Michaela at 303.579.5517, e-mail [email protected] or visit michaelaphillips.com. NMLS: 312874.