Most seniors are very comfortable living out their lives in their homes as long as they remain financially comfortable. Like everyone, they thrive in a familiar environment, enjoying their neighbors and familiar surroundings. However, income can quickly change post-retirement. Home financing can quickly become an issue. In addition to a mortgage payment, mounting medical bills, and daily living expenses, finances can feel thin for Seniors but there are options. Whether you need extra cash to pay your bills, or lower your monthly payment, refinancing your home is the option for you.
A cash-out refinance could also provide you with cash to pay for day to day living expenses, make necessary repairs and improvements to the home that could raise its value in the long run. If you think you’ll end up selling your home at some point in retirement, this may be the perfect option for you.
While health care costs continue to rise during retirement, refinancing into a longer mortgage term could add valuable dollars back into your monthly cash flow to help pay towards this. On the other side, you have to think about if you were to refinance into a longer loan term, this will help you to gain immediate financial relief in the form of lower payments but you have to keep in mind what will be best for your budget in the long run.
The human life-span is increasing! it is important to make sound financial decisions that will pay off in the long and short term and assist in providing a high-quality life. When considering refinancing your mortgage, be sure to look at the entire picture. Savings, income, lifestyle, and even travel should be considered.
Here are a few things to consider:
- How long do you plan to stay in the home?
- How many years are remaining on the mortgage?
- Will you pass this home on to your children?
- What is your goal for refinancing?
- How would you use the cash from a cash-out refinance?
- How much will the closing fees cost?
- How does the interest rate you will qualify for now compare to the rate you are currently paying?
- If you are getting a lower payment, how much money will that add back into your monthly budget?
- Do you have the budget to refinance into a shorter term?
- Will you pay for the refinance out of pocket or roll it over into the new loan?
- How would rolling the costs into the loan affect the monthly payments?
To learn more about refinancing as a senior, contact us now!