The more you know about refinancing and how to choose the best time to refinance for you, the better prepared you’ll be to make an important decision about your financial future. Here are a couple reasons why you may want to consider refinancing now – as rates are still well below 5% and, in some cases, even lower.
To Take Advantage of Historically Low Interest Rates
Source: MacroTrends – 30 Year Fixed Mortgage Rate Chart
The 30-year mortgage rate reached as high as 18.6% in 1981 and as low as 3.3% back in 2012. Today’s rates are close to those from 2012. That means that now may be the perfect time to consider refinancing your mortgage. Having a rate decrease of even 1% can save you tens of thousands of dollars over the life of your loan.
To Take Cash Out
You’ve been accumulating equity in your home as the principal portion of your mortgage payment every month. Now may be the perfect time to take advantage of that equity to fund your short- or long-term goals, such as: a home renovation or upgrade, paying down credit card or other debt, or covering college tuition.
A cash-out refinance may give you access to do so at a lower cost and longer term than other options like a personal loan (on average those fluctuate between 5.99%-28.99% depending on your loan amount and credit qualification).