3 Critical Reasons to Refinance Right Now

Is it wise to refinance in volatile, uncertain times? That depends on your individual situation, but in most cases, it can prove very beneficial. In the case of home refinancing, absolutely. If you’ve been on the fence about whether or not to refinance your mortgage, here are three reasons why now is the time to pull the trigger.

1. A Greater Chance of Approval

Depending on the way the tides turn, lenders could soon be less likely to take risks. Your options for a new loan could be limited, and those still available will have stricter requirements: a rock-solid financial situation, a better credit score, higher interest payments, etc. You’ll have a better shot of getting approved for favorable refinancing terms if you act now.

2. Lock in Low Interest Rates

If you started a fixed-rate mortgage when rates were higher than they are today, you’re paying more in interest. If you have an adjustable rate mortgage (ARM), your payments are bound to increase after a designated period of time. Reach out to your loan officer to learn more about today’s rates.

3. Free Up Capital

If you expect volatility in your financial situation, it could be a good idea to have more cash on hand to get through any setbacks you and your family experience. By refinancing, you can lower your monthly mortgage payments, leaving you with extra cash for emergencies. You might also consider a cash-out refinancing so you can draw extra funds from the equity you’ve built.

If you need even more incentive to restart your refinancing process immediately, consider these lesser-known benefits:

• Change Insurance: As long as you’re changing the terms of your mortgage, think about exploring new insurance options as well. You could save thousands of dollars on premiums over time by switching to a new insurance provider.
• Get an Escrow Refund: You may be eligible for an escrow refund during a refi if you change insurance or lower your tax responsibility. If your original mortgage payments included property tax and insurance payments as well, it’s also possible to get a refund if there is a remaining balance in the escrow account when you refinance.
• Skip Payments: It’s possible to skip a few months of payments in the transition from your current loan to your refi loan. Going a month or two without making your usual mortgage payment will free up cash you can use for other things.

Whatever your reasons for refinancing, there are advantages worth considering. Let your loan officer know when you’d like to discuss your options.