Is refinancing an option for you? Our Ryan Peterson lets us know why it could be an option.
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Refinance. It's a term that's been tossed around a lot more than usual in recent years. Why? Because interest rates remain at all time low levels.
“A 30 year rate is in the mid to upper three percent range and a 15 year rate is actually under three percent today. So what you're doing with a straight refinance is actually lowering your rate, your term or your rate and term both and making your monthly payments more affordable,” said Ron Zuba, M&T Bank Mortgage Sales Manager.
What do you do with the money you’re saving from those lower payments? Well, most people tackle home improvement projects, pay off some debt or send their kids to college.
“We're currently refinancing our daughter's house that we helped her buy. This is a unique opportunity to help her reduce her payments, stay in the house longer and reduce the economic burden on her. It was a great opportunity for us,” homeowner Robert Domenici said.
Zuba said, “You may have a large expense coming, like a college education. You'll leverage that equity in your home to take out more than the existing balance and pay for that large expense. It's a cash out refinance and it makes a lot of sense, but, again, you have to weigh all your options and figure out what makes the best sense for you.”
Not only can you reduce you actual, monthly payment, but a refinance will also give you the option of adjusting the term of your mortgage as well.
Domenici said, “It actually helped us lower our mortgage payment for this house and it also helped us redefine the terms so we can pay it off quicker. They won't have that mortgage hanging over them for most of their life like we did with our first home and a 30 year mortgage. We were able to reduce that and use the money for other things, like investing in retirement funds or helping to put money away for college for our grandchildren.”
If you've been considering refinancing your home, now's the time. Meet with your bank, take advantage of the unprecedented low rates and figure out a plan that works best for you. You've built up all that equity, put it to good use.