When should you consider home loan refinance, Tampa, FL? That’s the question. There are a number of factors that can serve as your guide in order to be as clear-cut as possible in your decision. Remember that whatever mortgage decision you make, it will have a big impact on your financial situation – and that impact could last long. That said, it makes sense to weigh all of the factors (and a mortgage professional can be very helpful on this) before you make your decision final.
When there’s a lower interest rate. A number of homeowners opt for refinancing when they find an opportunity to secure lower interest rates – because that could mean huge savings. The changing trends on mortgage interest rates gives that opportunity. At present, industry experts recommend refinancing only if one is able to secure 2% (or more, if possible) lower interest rate. However, it might be not worth it if you are just able to save a small amount, given that interest rate reduction. In other words, it is more compelling to go for refinancing at 2% lower interest rate when you have a 500k mortgage than when you have a 100k mortgage. With that, you need to figure out the number and do what the number tells you.
If you desire to tap home equity. You can access the equity of your home to cover some major expenses. For instance, you can use it for your home improvement costs or for your student’s college education. It is important to note, however, though tapping home equity can be utilized for such expenses, it still can make you vulnerable to some financial risk. Again, you have to weigh all of the important factors if you to tap your home equity line of credit by refinancing. Make sure to ask help from a mortgage professional who is experienced, familiar with your case, and knowledgeable about the existing state and federal laws relevant to mortgage.
If you want to shorten loan terms. Another reason that could be compelling enough to refinance your home is when you want to shorten the loan’s term. For example, if you are paying for a 30-year-fixed-rate mortgage, you can have it shortened to 15 years without a huge change in your current monthly payment.