Refinancing Surge Offers Great Opportunity
If you’re a homeowner thinking about refinancing to cash in on record-low interest rates, you’re in good company. Before you take the plunge, understand all your options and run the numbers.
If you’re only focused on making smaller monthly payments, you might be missing out. Many borrowers are switching to shorter terms, such as 15-year loans. Normally such a change would yield higher payments but, because of record low interest rates, the monthly payment may change only slightly. Compare monthly payments and total interest costs for 30-, 20-, 15-, 12-, and even 10-year fixed options, if available.
Because your home likely is the biggest financial purchase you make, and refinancing at current rates could yield the biggest reduction in overall interest payments you’ll ever get, take time up front to get it right:
Clean up your credit.
Shop for the best rate.
Start at SRP and ask about options and rates before you formally apply.
Don’t assume rates are going to keep going down, and don’t focus only on interest rate. A shorter term, even with a slightly higher monthly payment, could save you tens of thousands of dollars in interest over the life of the loan.
Remember that refinancing is not always in your best interest. We can develop a break-even calculation that shows how long you’d need to stay in your house to recoup closing costs and points.
The current rate environment is an unprecedented chance to secure a low-rate mortgage that can build equity and free up cash. Talk to a SRP home loan specialist today to learn about the benefits and your alternatives.
Copyright 2012 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.