![]() ![]() Refinancing can help you reduce future risk, according to Jason Fink, a professor of finance at James Madison University in Harrisonburg, Virginia. Switching to a fixed-rate loan: If you have an adjustable-rate mortgage, switching to a fixed-rate loan could be a good move.Many homeowners use a cash-out refinance to pay for home improvements. Getting cash out of your home: With a cash-out refinance, you apply for a new loan that’s larger than what you owe on your old loan - and take the difference as a cash payment. ![]() Reducing the length of the mortgage also lowers the total amount of interest you’ll pay over the life of the loan. With a lower interest rate, you may be able to switch to a 15-year loan and still have a manageable monthly payment. Paying off your mortgage sooner: If your original mortgage was a 30-year loan, you could refinance to pay it off sooner.Most experts recommend refinancing if you can reduce your interest rate by 0.75%. The amount you’ll save each month depends on the size of your mortgage and how much lower the new interest rate is compared to your previous loan. ![]()
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