If you are currently have an adjustable rate mortgage your payments will be going up due to interest rate hikes. It would be a smart move to refinance now when interest rates are low. This will lock you into a mortgage where your payments will not increase.
If you are considering cashing out equity in your home to pay off bills such as high interest credit cards now is the time. Consolidating your bills into one monthly payment with the tax advantages of your mortgage can save you thousands of dollars. Interest paid to your credit cards is money lost to you; interest paid on your mortgage will come back to you in the form of your tax deduction.
Interest rates are still at historic lows; you can refinance to a fixed interest rate around 5.75%. Mortgage lenders are desperate for your business and you may even be able to refinance you current loan at no cost. If you are in a mortgage that is currently negatively amortized you should run not walk to your mortgage broker. These “interest only” and “option” mortgages that have been so popular are starting to adjust to current market conditions. This adjustment is bad news for homeowners that will see their monthly payments shoot up.
If you are a homeowner paying on a first and second mortgage this is the time to refinance; especially if you have equity in your home. Second mortgages always carry higher interest rates and home equity lines of credit can be a nightmare.
If you have decided to refinance your home make sure you have a current appraisal on your home. Keep track of what other properties in your neighborhood are selling for. Your appraisal will use these values for similar homes up to 1 mile away from yours. The current value of your home will impact the equity you have and your corresponding interest rate. To learn more about refinancing your home sign up for our free guide to mortgages and mortgage refinancing.