With interest rates dropping as a result of the Federal Reserve's new program to purchase Treasury bonds and mortgage-backed securities, now may be a great time to refinance your home. Refinancing often benefits the homeowner by providing access to equity and a lower interest rate — which might mean lower monthly payments on your mortgage and more savings in your pocket. Before refinancing, consider the following:
Reducing the life of your loan may cause your monthly payments to rise, but you will save on interest payments in the long-run.
Extending the life of your loan can potentially lower your monthly payments, but make sure that your interest rate is simultaneously reduced.
Refinancing may not be for you if a majority of your loan has already been paid off or your property has decreased in value.
Consult with a CPA or a financial advisor before making financial decisions such as these.
Read more on refinancing your mortgage.
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