With the coronavirus pandemic and attendant economic recession, many American homeowners are looking for resources, whether by saving or borrowing.
Experts say the current low mortgage rate environment makes a refinance very much worth investigating.
It’s possible to save hundreds or even thousands of dollars a year on your monthly house payments. A refinance can also be a chance to switch from an FHA to a conventional loan, eliminating mortgage insurance.
But you can borrow against your home equity, too. Even without a pandemic, a cash-out refinance is a great way to get a significant sum at a modest interest rate. If you have at least 20% equity, you can typically borrow up to 80% of your home’s value.
You can use the money for just about anything - making major purchases, paying bills or consolidating other high-interest debt (such as credit cards or car loans). Many homeowners use ta refinance to invest in the home's value, with a major remodel or other home project.
Some homeowners may consider refinancing into a shorter term loan. Interest rates are so low, the payments on a 10, 15, or 20-year loan may still rival the monthly amount owed on your current traditional 30-year mortgage!
At Bay Equity Home Loans, our experienced loan officers can help you figure out if refinancing is the right choice.
As a new mortgage loan, your refinance is going to have new closing costs and fees, which can be rolled into the new loan, or can be deducted from the cash-out amount. We'll help you calculate what’s called the break-even point - how long it will take for your savings to be greater than your closing costs.
Everyone’s financial needs are different, but a refinance could be the right solution for you.
One thing is for certain – the uncertainty of mortgage rates. Waiting for the rates to drop lower could cause you to miss out on a great deal.
Visit us today. Mortgage rates have fallen to new record low multiple times in 2020, but there’s no guarantee that trend will continue.