Spurred by ongoing reductions to mortgage rates, the refinancing world is spinning a little faster these days.
According to the Mortgage Banker Association, the volume of loan applications rose substantially to close out the first month of the year.
The association's index measures the volume of mortgage loan applications, which jumped by over seven percent last month. As for refinancing, it was up by eight percent at the end of January, and 146 percent year over year.
The latest numbers are more evidence of the strength of the market early in the year, which may carry on through the peak selling season.
Have you and your family been thinking about the benefits of a refinance loan? If today's market conditions haven't already nudged you toward refinancing, here are five reasons why you might decide on taking advantage of this opportunity.
A better rate
Chances are that the rate you agreed to pay for your current mortgage is much higher than the going rate of today.
By far, most consumers will refinance their loan if it means paying less on interest.
Those who have since improved their credit standing may have extra motivation to refinance. With today's rates, a strong credit standing may only increase the prospects of securing a mortgage rate you may not mind having for the long haul.
Cash out, pay debt
Some consumers are leveraging today's rate and equity and applying for a cash-out refinance.
This loan can be used to pay off other debt, reduce the total amount due each month and save money on interest.
This trifecta is possible because mortgages are repaid over longer periods of time than most other debts, making it more consumer-friendly and easier on your monthly budget.
Pay less per month
No matter how you slice it, a loan program with a lower rate means both short- and long-term gains.
With a lower interest rate, borrowers can stay on track and keep the same payoff date under more favorable terms. Or, they can enjoy the savings by resetting the loan with the rate modification.
From 30 to 15 years
Your loan may have started as a 30-year home loan. A refinance, however, can get you into a 15-year fixed-rate mortgage in just a few years.
Before you know it, you could be paying off your mortgage faster than you ever expected and saving large amounts in interest.
Eliminate mortgage insurance
Unless you made a substantial down payment on your home, you're probably on the hook for mortgage insurance.
If you've recently reached the necessary threshold to avoid paying mortgage insurance, you may still be able to refinance and realize the savings of having no mortgage insurance and a lower rate.
If you're ready to make a move in today's market, please contact us today to learn more about our loan programs and how they can help you achieve your short- and long-term financial objectives.