Jill Schlesinger talks in CBS Eye on Money and explains about the benefits of Loan Refinancing. Two facts to consider these days:
• Currently, the Average Interest Rate is 3.65% for a 30-Year Fixed Mortgage Loan.
• Near 63% of loan refinance applicants are homeowners.
The purpose of a refinance is to take advantage of a lower interest rate, however, we need to consider the costs of refinancing. Usually, the costs are between 2-5% of the loan amount. This is like any other business, first, you pay the costs, later you get the benefits. So it is important to check when exactly you get breakeven. If you plan to sell the house in a few months, clearly this option is not a good one for you.
Also, the 3.65% average mortgage rate is reachable if you have good credit, meaning having a 740+ FICO credit score.
Debt triage is a good strategy for refinance. This means to consolidate all debts like old mortgage debt, credit card debts, and student loan debt, into a new, refinance mortgage loan. The benefits are that you will pay a lower interest rate for all these debts.
You also need to consider that new tax law says that you will not be able to deduct interest charges in your tax forms for debt not related to the home buying, ie credit card, and student loans.
Finally, Jill recommends using the 30-Year Loan instead of the 15-Year loans. This will give you more cash for other projects or repay back faster the loan.
If you need to find a lender, for your home refinance, do not hesitate to contact us, we can help you find the right lender. You can refinance with your current or with a new lender.
[Form id=”1″]Source: CBS This Morning Eye on Money Advice for homeowners looking to refinance their mortgage.