Here we go again!
2017 was projected to be a better time to purchase a home. Interest rates were rising and the mortgage industry saw a steep decline in refinance applications. The narrative was logical, the Feds were signaling a high rate environment and it would seem that everyone who wanted to refinance had already done so since we have existed in a low rate setting for over a decade. Fortunately, the market is unpredictable!
In the first half of the year, rates rose as expected and a quick decline in refinance applications followed. However, mortgage rates aren’t directly tied to Fed rates and the expectations didn’t stay on the projected path. Now we are presented with another window of opportunity for those who refinancing is still an option.
Reasons to Consider Refinancing
Shorten the Term of Your Loan
If you have a 30-year mortgage, now may be a great time to consider refinancing. With low interest rates, you may find that a 15-year mortgage is not much more expensive than the 30-year loan payment you have been paying.
Lower Your Interest Rate
As previously mentioned, interest rates are low. If your home is now financed at a higher interest rate, it may be a great time for you to consider refinancing. You could save thousands of dollars just by taking the time to fill out the necessary paperwork and gather the needed documents.
Lower Your Payment
Refinancing your mortgage at a lower interest rate could mean significantly reducing your payment. Lowering your mortgage payment could free up hundreds of dollars per month that could be saved or invested. Although refinancing to lower your payment could increase the term of your loan, it could make sense in your particular situation.
Move to a Fixed-Rate Loan
If you currently have an adjustable-rate mortgage, now may be the perfect time to refinance into a fixed-rate loan. Interest rates are low now, but they may not stay this low forever. Locking into a low, fixed rate can protect you from rising interest rates in coming years. Additionally, a fixed payment is easier to plan for and budget.
Cash Out Home Equity
It’s a tempting proposition to cash out your home equity by refinancing your home. It could even be a great financial move in some circumstances. Talk with one of our mortgage team members or your financial adviser to explore your options. At Mill City Credit Union, rates are not increased for refinances and we have an experienced mortgage team to help you select the best option for your situation.
Please call us at 800-284-6328 to learn more, or begin the application process online.