Refinancing a mortgage is something many people think about, then change their minds. Re-examining your loan options after a few years can open up the door to new opportunities when it comes to caring for and maintaining your home. You can choose to lower your monthly payments or use the equity to take care of other tasks. You have several options to take advantage of. The right lender can help you make sense out of the process.
Performing Renovations
If you have an older home, refinancing may give you the money you need to make much-needed repairs. Not only will this make your home more comfortable, it will also increase its value. Even newer homes can benefit from having a few repairs made. It’s important to work with a loan specialist to ensure you are not borrowing more than you need to do the renovations. Borrowing too much against the equity will reduce the project’s value and cost you more in the long run.
Making Upgrades
Replacing your roof or HVAC system are costly venture. Refinancing your home to pay for them will dramatically increase the value of your home and will provide a host of other benefits as well. Choosing to refinance your home to perform extensive upgrades is a good idea as long as you don’t borrow too heavily against your equity. This is also a good option if you are planning on selling your home in the next three to five years. When you choose to make upgrades, you increase the resale value of your home as well.
Lowering Your Payments
If you have paid down your mortgage but still have higher payments than you would like, refinancing your home without drawing on the equity can shorten the term of your loan and also lower your payments. Borrowing wisely and paying more than the minimum payment each month will allow you to pay off your home much faster. It will also give you the option to borrow against the equity later if an emergency arises.
Don’t Refinance a Good Loan
If you have a loan with a good interest rate and the term is short, refinancing may not be your best option, especially if you don’t need the money. Pay a little ahead each month and keep your loan the way it is. If you like your loan terms, the way they are, keep them.
When you have questions about refinancing your existing mortgage, call companies like Rob’s Loans. These lending institutions can work with you and find ways to make your payments more manageable. They can offer sound advice on how and when refinancing is most beneficial.
