Buying a house is a major decision for anyone. But over time, that decision—no matter how complex—pays dividends as your house becomes your home.
For many Americans, home ownership is most likely the greatest expense they will undertake during their lives. Although the market has shown vast improvement—recent research shows that only 4 percent of homeowners are behind on their mortgages—there is still room for progress. For instance, some homeowners may have all their money tied up in the walls, meaning they are stuck when it comes to figuring out how to pay for life’s other great expenses such as college tuition, vacations, and that new car, to name a few.
A number of situations may mean that it’s time for you to consider refinancing your mortgage, or replacing your current mortgage with a new one. After all, the last thing you want is to risk losing your home or be unable to fund your daughter’s wedding. But before you take that next step, you should know precisely what it means to refinance so that you end up in a better position financially when all is said and done.
Refinancing is the process of replacing a current mortgage in order to reduce monthly payments by obtaining lower interest rates. Nobody likes paying more than they have to for anything, and lower rates usually translate to lower monthly payments. For example, if you took out a $100,000 loan with a 6.75 percent interest rate, you’d have a monthly principal and interest payment of $649. If you were to refinance that loan at 4.5 percent, your monthly payment would shrink to $507.
The price of your home is likely to increase in value over time, generally speaking. If you’re about to send the kids off to college or want to pay for that long-awaited retirement trip, for example, you can take out a home equity loan while refinancing as well.
Would you like to lower your monthly payment? Are your interest rates too high? Is it time for you to take some equity out of your home?
We at The Milford Bank will answer all of your questions regarding mortgages and home equity loans and help you get the financial security you and your family deserve. Click here to meet our mortgage specialists or to access our free prequalification form.