Refinancing in San Diego
Refinancing is the process of obtaining a new mortgage in order to reduce monthly payments, lower your interest rates, take cash out of your home for large purchases, or even change mortgage companies. People will typically refinance when they have equity on their home, which is the difference between the amount owed to the lender and the worth of the home.
Benefits of Refinancing
There are many benefits to refinancing your home loan. By refinancing, you are able to redefine your mortgage loan so that it can meet your changing needs. Refinancing allows you to lower your monthly payments and even your interest rate. You also have the ability to change an adjustable rate mortgage to a fixed rate mortgage in order to protect yourself from future payment increases. Refinancing also allows you to stop paying for Private Mortgage Insurance (PMI) and most importantly, it gives you the ability to cash out some of your home equity for large purchases. This can include a new car, home renovations, or even paying off credit card debt.
Should You Refinance?
Refinancing isn't ideal for everyone. There are certain scenarios where you will benefit more from refinancing than others. Refinancing makes more sense if you are in your home loan for 5 years or longer as the savings can offset the cost of refinancing. There are also typically no cost and low cost options for those who would like to refinance but do not plan on staying in their homes for long or may want to refinance again in the near future.
Since home values typically increase over time, the value of your home will likely be higher than it was when you purchased it. If this is the case with your property, you can utilize a refinance loan to access some of this equity for a large purchase or to pay off other debts.
If you're looking to do some renovations to your home, refinancing can be a wise choice. The equity you withdraw from your home can be used to bring up the value of your property through various home improvement efforts.
If your situation has changed since you initially acquired your mortgage you may want to consider refinancing in order to update your mortgage terms. You may want to turn an adjustable rate mortgage into a fixed-rate mortgage or even choose a shorter loan term in order to pay off your mortgage faster.
Get in touch with us today to find out if refinancing is right for you!