#1. It Can Lower Your Interest RateDid you know that if you can lower your interest rate by at least 1% (or 0.5% on higher loan amounts), you should consider refinancing? Interest rates are incredibly low right now, and the chances that you can get a better rate by refinancing now are much better than in previous years. This is a huge asset because you could end up saving a lot of money in interest paid throughout your loan.
#2. Switch Your Loan TypeThere are many different loan types available for homes, some are better for certain people than others. If you currently have an adjustable-rate mortgage (ARM), you may want to switch to a fixed-rate mortgage (FRM). This can allow you to lock in a low rate for a long time! It might also be feasible to drop from a 30-year mortgage to a 20 or 15 year. With the lower rates, you could have close to the same payment you currently have but shorten the term of the loan. This is something you can discuss with your mortgage lender at the Lake of the Ozarks!
#3. Be Aware of Balloon PaymentsSome mortgages have a large payment due at the end of the loan term - usually, 5-7 years, called a “balloon payment.” This type of mortgage is a short-term loan that is set up like a long-term loan for the first few years. You may need to refinance your loan to avoid paying this large expense.
#4. Stop Paying Private Mortgage InsuranceWhen more than 80% of the home's sale price is borrowed, sometimes the borrower is required to purchase private mortgage insurance (PMI). If the home's value has increased, you can use this amount to refinance and stop paying that PMI.
#5. Cash Out Home EquityHome equity is often used as a way to finance a remodeling project, college tuition, car purchase or a vacation. If your home's value has increased, you can refinance to cash out that extra amount. You would actually be refinancing your mortgage for more than you currently owe on it and then pocketing the difference.
#6. Consolidate DebtsIf you have a lot of high-interest debts, you may be able to save money by consolidating those debts into a mortgage. Auto loans, credit cards, second mortgages, and other debts can all be included in your refinance.
Do you have more questions about refinancing a Lake of the Ozarks home? Team Lasson would be glad to answer your questions! You can start by filling out an application on our website (www.YourLakeLoan.com) so that we have an idea of your financial position. We look forward to helping you decide if refinancing is the right choice for you!
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Senior Loan Officer
NMLS #: 493712
4655 B Osage Beach Parkway
Osage Beach, MO 65065
**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.