Have you considered how a lower interest rate may impact your mortgage payment? Maybe you’ve given thought to shortening your term to pay your home off sooner? It may be time to look into refinancing. Whether you’re drawn to cost savings or need to tap into your existing equity, refinancing your mortgage may be more cost efficient and streamlined than you think. There are several benefits of refinancing.
1. Lower Your Interest Rate
The most common reason most borrowers refinance is to lower their interest rate. Reducing your interest rate is not only a cost savings but it may also help to build equity faster. Paying less on your mortgage will free up cash that can be used towards savings goals.
2. Remodel Your Home
Have you dreamt of a chef’s kitchen or a bathroom makeover but didn’t think it was in the budget? A refinance just may be the solution! A refinance can give you the cash to make those improvements which also helps to increase property values. According to the US Census Bureau’s Housing Survey, about 50 percent of homeowners use the equity in their home to make home improvements. This can benefit your everyday living and help make your home more appealing should you decide to sell later.
3. Invest in Another Property
Build your wealth by investing the money in another property and becoming a landlord. Having equity build up in not only one home, but two, can be a great financial move. Be aware that this is not a small project, though. Going down this path will lead to a lot of different financial and legal undertakings, but in the end is worth it.
There's so many things that you can do with a home equity loan. All of the money taken out from this kind of loan is still tax deductible mortgage interest. We hope these few tips helped you when thinking about doing a cash out loan or home equity loan. For more information, contact us now!