First of all – what’s a Goldilocks Market? It’s a market that’s not too hot and not too cold – it’s just right! That means you’re not refinancing in an overpriced real estate bubble waiting to burst. As a homeowner, this is the ideal type of market to refinance in.
Let’s look at why you might consider refinancing. The number one answer is to save money and lower your payment. Our average borrower saves $300 per month.
The process is simple. You won’t have any out-of-pocket expenses. As a digital lender, we can save you time and money, and with home values soaring, you’ll have more options. There’s never been a better time to refinance your home.
Let’s Break Down the Benefits of Refinancing
- SAVINGS – Our average borrower saves $300 per month. Refinancing can lower your interest, reduce your payment, and change the loan term so you can pay it off faster. You can take your equity and get cash out for home improvements, pay down debts, or anything else you want.
- LOW RISK – there’s no risk in seeing if refinancing is right for you. By filling out a quick application and having a short conversation, your loan officer will be able to go over how much you could save and how much cash out you might get.
- NOTHING OUT OF POCKET – unlike a purchase loan, you don’t have to come up with the money to refinance. We wrap the fees into your loan. That makes it more affordable. At Homestead, we call it NOOP.
- EASILY ACCESSIBLE DATA – compared to five years ago, there’s so much more data available that can save time and money. For example, if you’re self-employed, we can calculate your income faster, we’re often able to find programs with appraisal waivers, and paperless closings are more cost-effective.
- SOARING HOME PRICES – US home prices are continuing to rise and that means if your mortgage is 12 months or older, there’s a good chance you have untapped equity. Refinancing now could give you the cash out you need for renovations.
Which is best for you – a rate and term refinance or cash-out refinance? Let’s explore your options.
Rate & Term Refinance
If you can save 1% or more over your current interest rate – consider a rate and term refi. On average, our customers save $300 per month. Now, let’s take a look at even more perks of a rate and term refinance.
Eliminate Private Mortgage Insurance (PMI)
One of the biggest reasons homeowners want to refinance is to get rid of PMI. Paying $100 to $250 or more monthly for mortgage insurance is throwing your money away.
Change the Term of Your Mortgage
If you have a 30-year loan, you can switch it to a 15-year or 10-year term. With a shorter term, you’ll pay the loan off sooner, build equity faster, and pay less interest.
Take Advantage of a Cash-Out Refinance
If you have equity in your home, you can tap into it with a cash-out refinance. Use your cash for:
Debt Consolidation
Pay off your debt and eliminate high-interest credit cards and loans. You’ll feel relieved with fewer debts to pay and more money at the end of the month.
Home Improvements
Reinvesting in your home by remodeling or building an addition can raise your property value. Some of the most popular home improvements include:
- Kitchen and bath renovations
- New roof, siding, and garage door
- Built-in pools and outdoor kitchens
- Room additions – home office, media room
- Building out the attic or basement
Purchase an Investment Property
Leverage your equity and buy an investment property. With rents rising and low-interest rates, it’s easier to cash flow.
Invest Your Savings
Helping you save money is our job. We also like to encourage you to invest your savings. Here are three options to consider.
- Pay down your mortgage
- Have some fun
- Invest the money
Let’s look at each option.
Pay down your mortgage by putting extra money towards your principal each month.
This is probably our least favorite. Here’s why. If you pay down your mortgage $10,000 each year, you’re saving some money, yes. But your interest rate is very low (2.5% to 3%), so you’re not paying that much interest per year anyway.
Compare that to investing in a reasonable S&P fund where you can get 9% on your money. Why use your cash to pay down your mortgage when you can make more by investing your monthly savings?
Have some fun – who doesn’t like to have fun by taking a great vacation? Creating memories are essential. But keep things in perspective and save some money for investing.
Investing is our number one choice. Put your savings into a stable S&P fund. Another excellent option is to buy an investment property. Recurring rental income is a great way to start building for retirement.
Isn’t it nice to have extra money that you need to decide what to do with?
Our Refinances are FAST!
Face it – nobody gets out of bed in the morning, saying, “I want to hang out with my lender today and fill out stacks of paperwork.” We know you’re busy. And you shouldn’t have to spend your lunchtime applying for a loan.
One big reason we’re so fast is that we’re an in-house lender. That means we do everything from taking your application, sending it to our underwriting department, and approving your loan.
The choice is clear. You’re BUSY. We’re FAST.
Homestead Financial Mortgage is a top digital mortgage lender that knows how to make the refinance process smooth and stress-free. Our low-interest home loans are some of the best in the states we serve. These states are Arkansas, Colorado, Florida, Illinois, Indiana, Kansas, Missouri, Ohio, Tennessee, and Texas. Contact us today to learn more about the home loan products we offer that are right for you.