You probably already know that there are perks to owning your home like feeling a sense of pride and receiving a return on your investment. But there’s one major perk that doesn’t seem to get as much attention. We have Laurie Maddex of The Maddex Team at AmeriFirst Home Mortgage with us today to share some of her lending expertise with you all! Laurie, take it away!
There’s nothing I love more than providing financing to a family to get them into their dream home. That’s really the shiny part of my job as a loan officer. But what many people don’t think about is the less exciting but incredibly practical part of what I do: refinances.
Refinancing your home provides options for homeowners, and it’s easier and more beneficial than you may think. Here is a list of three reasons why you may want to put refinancing your home on the radar as mortgage rates drop:
Save money on monthly payments.
There are a few different ways that refinancing can save you money each month. Sometimes saving just a couple hundred dollars each month really eases up your budget and helps you sleep better at night. Or, it might enable you to sock away a little bit extra to put towards your rainy day fund.
- Depending on where you locked in your interest rate on your mortgage, you may be able to refinance with a lower rate than before. This will directly affect your monthly payments.
- In recent years, many areas have seen significant home price acceleration. This means that your home may have jumped in value so much that you could drop your Private Mortgage Insurance (or PMI). Some loans products don’t even require a refi to drop PMI!
- Most people buy their homes using a 30-year term loan product, so at this point, you may be able to refinance into a 15 or 20-year term loan. Shorter term loans have access to lower interest rates, so you may be able to pay off your home soon AND do it with payments less than or equal to your current payments.
Pay off high-interest debt.
You know that 0% Ashley Furniture offer you took last year when you replaced your living room and dining room furniture? The one that you thought you’d be able to pay off before the interest skyrocketed to 22%? It might be time to pull some equity out of your home and repay those ridiculous high-cost debts.
Maybe you didn’t buy furniture, but you want to pay off a car loan, cover college tuition for your kid, or just take care of old debt that has been following you around. These are all good uses for a cash-out refi.
Finance larger home improvements.
This is the most fun option! If you are anything like me, home improvements look like this: Start on a bathroom. Work a little at a time on the weekends. Live in a disaster area for 6 months. Believe me, this is not a good long-term plan.
Here’s your better option: refinance your home. Use that equity to finance those bigger projects that you’ve been putting off forever. Maybe put in that pool, or renovate your bathroom or kitchen space. Pay someone to go in and do an amazing job in a reasonable amount of time so that you can enjoy your home!
Bottom line: if you have been in your home for more than 2 years and are looking to reduce your costs, pay off debt, or have a project in mind, reach out to your mortgage professional and see if a refinance is something that you should consider doing. A phone consult should be enough to let them analyze the costs and benefits that you could realize with a refinance.
If you don’t have a mortgage professional by your side already, I’d be honored to help you consider short-term monthly savings versus the long-term interest or PMI reduction and let the math help guide you through this process.
Thank you, Laurie, for sharing this helpful information with us all!
Laurie and her husband, Bryan, are the creators of The Maddex Team at AmeriFirst Home Mortgage. Together, they have over 20 years of banking and mortgage experience.
LAURIE MADDEX | LOAN OFFICER
The Maddex Team