Reasons To Refinance

(Interest rates have been at historic lows recently as the Federal Reserve stopped raising the rates a consecutive 17 times this past summer. )

These low rates have caused many people to consider refinancing their mortgage into a new loan product. Refinancing a home is actually quite a simple process, but many have a common misconception that refinancing will be difficult.

This is probably because these people did not work with a knowledgeable and accredited company like LEI financial. Our loan officers are actually mortgage coaches who can guide you on your journey of refinancing your home loan.

A recent article by Nathan Dawson of mortgage.araund.ru.com, “Mortgage refinance: four ways to know its time to refinance your house,” discusses ways a mortgage refinance may be beneficial right now.

The first reason why completing a mortgage refinance right now is a good idea is because rates are low and you can free up some extra cash, which is always a good thing for every homeowner regardless of income.

For all of you who don’t know, the primary goal of a mortgage refinance is to get a better interest rate, and therefore a lower monthly payment.

“No matter what has happened to you, there is always a good reason to start saving money. A lower rate on your mortgage can help you stretch out the payments so that every month you are paying less to live in your house than the previous month.”

“When interest rates are low and you had previously locked your mortgage into a higher price, it might be a good idea to shop your rate around to see how low you can get it. The early 2000's have been an environment of very low mortgage rates which make it a good idea to shop around to see if you can refinance your mortgage.”

Another reason to refinance is if you need extra money in your pocket due to an unexpected circumstance such as a divorce or a job loss. A refinance can be just the thing you need to get that much needed extra cash.

If you are seriously considering doing a refinance, shop around to different lender to see if someone else can give you a better deal than your current company is presently offering you.

“If you've been spending a lot of money and paying off the balances on your credit card on a monthly basis there is a significant chance that your credit score has increased recently. An overall better credit score is better for everyone including your lenders. If a new lender sees that your credit score has increased recently, she might be in a much better position to give you a better deal on your mortgage than you think. She could refinance your mortgage by shopping the deal around at more banks and finding the best one for you. Shop your refinancing around, it can't hurt.”

If you have a small business, doing a refinance could also be very beneficial for a variety of extra reasons. Freeing up some cash could give you some more opportunities to invest it in more equipment for your company or start a new business venture.

“Refinancing a mortgage might be a fantastic idea to increase capital reserves and to plan for future investments. Many business owners who work out of their homes constantly try to decrease their monthly payments so that when it comes time to pay their business bills, they have a little extra capital. Always check with a CPA or attorney to determine what is deductible and what isn't. But, more money is more money, even if you are lending it from yourself to your business.”

Back to Articles