How Refinancing Your Home can Benefit Your Family Financially

Written by  //  2015/06/01  //  Home Financing  //  No comments

Outside of initially purchasing a house, refinancing one’s property is often one of the biggest financial decisions that anyone will ever make. When refinancing is carried out at the right time and in the right manner, it can be an incredibly good choice for families that are looking to cut down on their monthly expenses without risking any of their assets. Here is a look at why refinancing might be the right choice for your family.

Build Your Equity Faster

When homeowners get a raise or have an increase in their family’s income they may want to consider refinancing in order to build their equity faster. An example of this would be a homeowner that originally went with a 30-year mortgage due to a lower paying job or position in the company. When they are promoted, they can then refinance with a 15 or 20 year mortgage in order to build equity and save on financing fees.

Negotiate Lower Rates

Negotiating lower rates is one of the most common reasons that homeowners will refinance their home. Over the years, a long list of variables may have improved your credit or brought another income into the home. By refinancing, you can negotiate for lower monthly rates or better interest rates. This could free up thousands of dollars over the lifetime of your mortgage.

Potential New Discounts

Many homeowners are simply unaware of all the discounts that they could be missing out on by not refinancing. Families have the option to contact companies such as Low VA Rates to see if they qualify for new refinancing programs due to their past or current service. Loan officers may also give a variety of discounts to homeowners that have transitioned into new fields such as teaching or working for the government.

Re-Invest Current Equity

If your home does have a good deal of equity but you are struggling with other high interest payments such as student loans or credit card debt, then you may want to consider refinancing. Refinancing and pulling out a small amount of the home’s equity could help you immediately pay off other debts that are at a much higher rate than your mortgage. Families with shaky finances may not benefit from this, but those with a solid financial history could benefit from a lump cash payment.

Before refinancing, it is important for homeowners to have a clear understanding of their current financial situation and their future goals. Taking a look at long-term goals will help you make the most out of your refinancing and provide a highly lucrative option.

Image credit: Refinance by GotCredit, on Flickr

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