With mortgage rates hitting all-time lows over the past year, you have probably wondered whether or not this is a good time to refinance your mortgage. In general, it is always a good idea when you are able to save money on your loan – be it a home loan, a car loan, or even a student loan. However, there are several situations when refinancing may make more sense than at other times in your life or in the life of the loan. Remember, personal finances are personal, and so there is no one-size-fits-all solution or golden rule to follow when it comes to making such decisions. That being said, here are just a few situations when it might make sense to refinance your home loan.
Refinance your home loan if it will save you money.
This may seem obvious, but if you are saving money by refinancing your home loan it is generally worth investing the time, energy, and effort filling out the paperwork and finding another lender. Fortunately, the internet is making it easier than ever to find and compare lenders when you want to refinance and get a lower interest rate. Just go to your favorite search engine like Google or Bing and type in “Home Loan Refinance” to see what options come up. From there, you can research various mortgage products to see if you qualify for a refinance that makes sense for you and your mortgage.
Although interest rates started rising this year, they are still much lower than in previous years. Just because you aren’t quoted at an interest rate below 3% doesn’t mean you won’t still be saving money on refinancing. Also, remember that you need to have a solid credit score in order to refinance and get a competitive interest rate. If you have bad credit or low scores, spend the next few months upgrading your credit score in order to qualify for a better refinance rate on your new loan as a borrower.
Refinance your home loan if you are interested in investing the difference back in your home.
Refinancing can be a smart move, even as a homeowner, when you can put the money you save back into your home by getting a better interest rate and lowering your monthly payment. Sometimes this type of strategy can take the form of a new loan or a home equity loan. However, if you save patiently and diligently, you can wait a few months after refinancing to begin your home improvement project. Home renovations are a great way to use the money you “make” from a refinance, as it were, as it ultimately increases the value of your home.
One thing to keep in mind when renovating your home is to think about what could provide security to others when they are considering buying in your area. For example, if you live in Florida, it makes sense to think about home renovation tips for Florida homeowners. A pool is going to be far more impressive than architectural clapboard to many potential Florida buyers.
However, if you are looking to increase your Colorado home value, focusing on your roof is not a bad idea. Especially because it can be expensive to hire contractors to repair or replace a roof, a new roof can be a huge benefit for any home in the market. Especially in Colorado, where the weather can be brutal when it comes to snow and hail, having your roof in tip-top shape before listing your home could be a huge boon. Finding roofers in your area to do this type of job is important so you know you are not getting bad workmanship and will need to file an insurance claim later.