When you see articles or ads online about finances, most likely you have encountered one that advises you to refinance. Refinancing can be a great move that can save you money in the long run and keep you out of financial trouble. Refinancing has to be done for the right reasons and in the right conditions, however. What are these reasons and conditions?
Better Rates Today
Refinancing for reasons of short-time pleasures will be a bad idea. You can lose money instead of saving money in this way. You can go ahead with the refinance; however, refinance mortgage interest rates here in Utah have fallen below the interest rate you currently pay for.
Check the Rates
The national average refinance rates currently sit at 3.83 percent for the 30-year fixed-refinance. The 15-year fixed-refi sits at 3.07 percent. Finally, the 10-year fixed-refi sits at 3.01 percent. When your current interest rate sits around 4.00 percent and above, you can apply for that refinance mortgage.
Reasons to Refinance
You can also follow through with the refinance for these other reasons. You will increase your home’s value through home improvements. When there isn’t a big monthly payment increase, you can pay off your mortgage faster. You want to move from an ARM whose rate may move higher unless you refinance to a fixed-rate loan.
Conditions also have to be just right if you plan to refinance. For one, if you plan to turn your house into a rental, or if you plan to sell it in a few years, refinancing will ensure you pay off your mortgage by the time you leave your house.
You can also refinance if you have come upon financial blessing. You may have gotten a promotion. You can choose to allocate more of your income for a shorter refinanced mortgage. You can pay your mortgage off several years sooner in this way.
When it comes to refinancing, you simply have to make sure you do it for the right reasons and in the right conditions.