By: Laine Buquoi
If you want to make a big impact on your finances in 2019, you won’t find a more powerful tool than refinancing your home mortgage loan before the holidays.
Rates are still hovering in the upper 4s or low 5s on a fixed rate loan with good credit even though the “all time low” media blitz has passed. Don’t fall into the trap of thinking a 5% rate is “high”… remember, a good fixed rate mortgage is an incredible financial tool to put at your disposal!
As Christmas & the New Year approaches and you start thinking about your finances, here are a few things that may help you figure out if refinancing right now may be a good move for you:
- Would Having Fewer Payments Help Right Now?
One of the main reasons people refinance is to consolidate debt.
Rolling multiple debts into a single, fixed rate mortgage payment could put your finances in good shape heading into 2019 a number of ways including:
- Ending the cycle of paying high interest rate on credit cards
- Creating fewer payments to manage
- Saving money with lower total monthly payments
- Protecting you from rising or high interest rates
- Getting some cash out to help with holiday shopping
You can use a refinance to payoff and consolidate high interest credit cards, short term HELOCS, student loans and even auto loans.
Tip: Compare your current monthly debt obligations to what you could potentially be paying with 1 fixed rate mortgage after refinancing.
- Could You Pay Off Your Home Faster?
If you’re planning to stay in your home for the foreseeable future, there’s a chance you could pay off your home loan in ½ the time without taking on a big increase in your monthly payment.
How?
By going from a 30 year fixed to a 15 year fixed mortgage.
People are often SHOCKED at how much faster they can pay off their mortgage and how minimal the payment difference is between a 30 and 15 year fixed.
Paying off your mortgage early turns your home into an equity powerhouse & is a brilliant move for your finances headed into 2019.
Tip: Compare the overall mortgage payment and how quickly your balance would be paid off with a 15 year loan vs your current 30 year loan.
- Want to Take a Break from Payments for a Month?
One additional benefit to refinancing during the holiday season is that you get to skip making a mortgage payment (at least for one month)!
Getting one month without a mortgage payment is pretty standard when you refinance. For example, if your refinance closes on December 10th, you wouldn’t have to make your next mortgage payment until February 1st because mortgages are paid in arrears.
Having a one month break from mortgage payments right around the time your credit card bills from Christmas are coming in is like giving yourself a little holiday gift 🙂
Tip: Talk to your loan officer to see how closing dates affect the first payment due on your refinance.
Start the Process with a Phone Call
The easiest step in the process is that first phone call or email to your loan officer to find out how these ideas may apply to your financial situation.
There’s no need to feel overwhelmed by the idea of refinancing. We’re here to help you understand the process and get the details so you can make an informed decision.
Contact us at 504-833-2111 to take that pivotal first step today!