Considering Refinancing Your Home on Long Island
Thinking about refinancing your mortgage? If so, based on current trends you may want to act sooner rather than later. That being said, any sizeable financial undertaking should only be entered into after careful consideration. Here is some useful advice to consider before you refinance from a Long Island mortgage company, Cliffco Mortgage Bankers.
Rates are still low, but may not be for long.
Low-interest rates are typically the most attractive reason to refinance your home loan. Reducing your rate by as little as one to two points can allow you to save significantly on your monthly payment. While rates are currently on the rise, they are still drastically lower than they were just a few years ago. If your current rate is at least one point higher than today’s average interest rate, then it’s worth having a meeting or phone call with a Cliffco loan representative to go over your options. That would be the time to also discuss the possibility of rolling your closing costs and fees into your monthly payment if that is something you desire.
Unpredictable monthly payments make you uneasy.
Many borrowers enter into adjustable-rate mortgages (ARM) for one reason or another. Perhaps rates were high when you originally secured the loan so it seemed like a good option. However, now that rates are low, it makes sense to secure a fixed-rate mortgage so you’ll have a predictable monthly payment. Therefore, refinancing is a good idea particularly if you are not planning on selling your home in the near future.
You would benefit from one monthly payment.
If you purchased your home in 2007 or earlier, you may have taken out a first and second mortgage on it in order to avoid paying personal mortgage insurance (PMI). If so, it is very likely that second loan is an ARM. Either way, it is an ideal time to combine this debt into one low-interest loan with one reduced monthly payment.
You’d like to pay off your loan in less time.
Borrowers typically prefer a 30-year term when they first purchase their home, as it allows them to make lower monthly payments over a longer time period. However, as you get older and more financially stable, you may be attracted to the idea of paying off your debt by retirement or soon after. Those with the financial means can do so by refinancing into a lower-interest mortgage with a loan term of between 10-20 years. Rates are generally lower with these loans as there is less risk for the lending institution.
To find out if you should take advantage of today’s low rates by refinancing your home loan, contact Cliffco Mortgage Bankers today by calling (516) 408-7300 to speak with one of our licensed mortgage consultants.