One of the most common questions asked during our Annual Mortgage Review Process, is ” Does it make sense to refinance right now”? The answer to that questions is, it depends…
When does a refinance make sense?
Here's where we start...
It begins with the amount of home equity in the home. If there is more than 20% equity and the current interest rate is above 4.25% or there is currently mortgage insurance on the property, it makes sense to just do a rate and term refinance to remove mortgage insurance and lower the interest rate, effectively, lowering the payment. If it is an FHA loan at a very low interest rate, it may NOT make sense to refinance and consulting a mortgage professional to run the numbers is your best option. Athena Mortgage Group can provide you with a free Property Valuation Report that shows recent sales and other critical factors about the area.
When considering a cash out refinance to pay off credit card debt, make home improvements or pay for college, it makes sense if the return is worth the higher payment.
When it comes to paying off credit card debt, Athena Mortgage Group will calculate the total savings per month vs. the current monthly mortgage payment. In addition, if family budget allows, we can calculate how much you can accelerate paying off the mortgage, by applying the monthly savings towards the principal balance every month. You might be surprised at how much faster you can pay off a mortgage by just adding a few hundred dollars a month towards principal.
When taking cash out for home improvements, it is important to keep in mind improved quality of life and increase in home value. Is it worth the investment? Chances are pretty high that major improvements will increase the value of the home.
When considering a cash out refinance on your home, contact a mortgage professional that can start with a good idea of what the home in Colorado is currently worth through a Property Valuation Report and provide you with all your options and savings over time.
Property Valuation Reports are based on recent recorded data and are not used in the final determination of the value of the home. When taking cash out of a property, the lender always requires an appraisal by an approved Appraisal Management Company.