When is the Best Time to Refinance?

When is the Best Time to Refinance?

When is the Best Time to Refinance?

Interest rates on mortgage loans are still at historically low levels and are even lower today than they were a year ago on longer-term loans, according to Freddie Mac.

So, it's a natural time to consider whether or not you should refinance your mortgage.
Interest rate drops aren't the only reason to consider a refinance. You should also consider refinancing when you need cash immediately or when you know that you can qualify now, but may have concerns about qualifying down the road.
If you're looking to get cash out of your house, you have a few options. For instance, you can refinance for a higher amount if you're house has appreciated in value. Typically, lenders will want your home to have appreciated by at least 20 percent before allowing borrowers to pull out money.
If refinancing the first mortgage doesn't make sense, home owners should consider a second mortgage – sometimes known as a home equity loan or revolving line of credit. However, these loans may come with higher interest rates and shorter terms, which would result in higher payments.

If you have an immediate need for the money – such as paying for home improvements or a child's education – a home equity loan may be the best option. If you're looking to have money available for emergencies, consider a line of credit where you only have to pay on what you take out. While interest rates are lower (now, anyway) the interest you'll pay on money that sits will be more than the interest it could accrue in a savings account. There's no need to waste money by just having it available.

Regardless of your reason to refinance, you want to make sure you can do it without taking on extra costs, increasing the balance or significantly adding years to the term.
When you're ready to refinance your home mortgage, stop by your nearby banking center and talk with one of our experts today to learn how Republic Bank can possibly save you more money.

This information is not to be used as investment advice, but for informational purposes only. Republic Bank & Trust Company prohibits the dissemination, distribution or copying of this document without the Bank's prior written consent. Please consult your financial or tax advisor for further information. Member FDIC.