5 Signs It’s Time to Refinance
Want to save money? That’s typically the top reason to refinance your mortgage. Sometimes, it’s not quite as simple as it sounds. Lowering payments is only one way to save. There are several good times and good reasons to refinance. At ZeusLending, we help homeowners and investors from all over the country determine when, why, and how to refinance their mortgages to save money. The first step is recognizing the ideal conditions for a refi. Here are the five most important signs to look for if you’re considering a mortgage refinance:
1. Federal interest rates drop.
You may have heard in the news recently that interest rates are dropping. For most mortgage holders, that’s great news. If you bought your property at a higher rate, now could be a great time to refinance. Historically, the rule of thumb is that refinancing is a good idea if you can reduce your interest rate by at least 2 percent. Actually, any amount over .25% means big savings over the life of the loan and is enough of an incentive to refinance. Now that interest rates are a lower, you could consider refinancing to shorten the term of your mortgage and pay significantly less in total interest payments.
2. You need cash for expenses.
Ready for a vacation? House need renovations? Or maybe you’re just sweating over another year’s worth of tuition or back-to-school expenses. Whatever your need, a refinance is a smart, low-cost way to tap into some cash. If you’ve built up equity in your property or your home has appreciated in value, let your biggest asset work for you. ZeusLending helps many customers use a refinance to pay off those high-interest debts like credit cards —freeing up their credit for more pressing expenses. If you need an infusion of cash or credit, contact us today for a refinance strategy session.
3. Your credit score improves.
If you had less than stellar credit when you first took out your mortgage, you may believe you won’t be able to secure a super low interest rate because of your credit score. But if you’ve steadily worked to improve your credit over the years, it’s likely your credit score has improved, too. The age of your credit history is one of the biggest determining factors when it comes to your score, so simply having credit for longer will help improve your numbers. ZeusLending can help you review your money-saving refinancing options.
4. You’d like to skip a couple mortgage payments.
This is a nifty trick that our customers love! When you close your refinance and your payment for that month is still outstanding, you do not have to make that mortgage payment.
For example, let’s say you close your refinance on June 10 but have yet to make your June mortgage payment. Well, after a refi, your first payment is still not due till the following month—August. This way, you’ve effectively got two months, June and July, without a mortgage payment. Put that money into savings, pay off some debt, or splurge on the family— it’s up to you!
5. Your payment has changed.
Over time, many homeowners experience changes in their payment due to rising tax rates or home values. If you are currently paying back an escrow shortage that is causing your payments to go up, a refinance may be the right tool to fix your escrow account without having to come out-of-pocket for it. The best part is that whatever amount you currently have in your escrow account is refunded to you after closing. Also, if you are currently paying for mortgage insurance and your house has appreciated and/or you have paid down your balance, you may be able to drop your mortgage insurance altogether and save that monthly charge.
Recognize any of these signs in your own life? Then the time to refinance is now! ZeusLending can help. Contact us today for a free consultation on your mortgage, interest rates, and refinancing options. We’ll walk you through all the possibilities so you can make a smart, informed choice. It’s the best part of our job—We love saving people money!