Refinance Calculator
Interest rates are still at near historic lows. Many experts including the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Mortgage Bankers’ Association and the National Association of Realtors predict only modest increases in 30 year fixed rate mortgages during the next 12 months.
And property values have increased significantly in much of the US housing market during the past two years. According to Pulsenomics’ 2021 3rd Quarter Home Price Expectation Survey, home values are likely to continue appreciating through 2022 and beyond at a rate of 3-6%. This increase in home values has created greater equity for home owners. Equity is the difference between what a property is worth in today’s real estate market and what is owed on that property.
Low interest rates coupled with greater property values are ideal conditions to consider refinancing.
Reasons to Refinance
Here are some potential outcomes from refinancing:
Lowering interest costs over the term of the mortgage loan.
Lowering monthly payments.
Reducing the loan term to payback less in interest over the lifetime of the loan.
Borrowing more than the current mortgage balance to pay off other higher interest debt, invest in other property, pay for travel or pay for college expenses., among other potential uses of funds.
Consider discussing refinance prospects and types of refinance loans with a financial planner, tax accountant, realtor, estate planning attorney and/or mortgage loan agency. Once you are clear about reasonable financial goals, refinancing may be an important part of your successful plan.