Your home is one of the greatest assets you have. One of the best ways to take advantage of its value is by refinancing, especially if it makes sense for your situation. It can help you secure great benefits, but as interest rates continue to rise, is it still a good idea to refinance your home in Northern VA?
Mortgage refinancing is a great way to reposition yourself financially. Most of the time, refinancing will allow you to get better interest rates and modify loan terms that can help free up your budget.
Ideally, refinancing your home should only be done if you can get a better deal. That means you get lower interest rates or a more predictable monthly payment if you’re not on a fixed-rate mortgage.
If you’ve been thinking about refinancing your home in Northern VA, here’s a list of things you should consider.
Generally, it would be a good idea to refinance your home if you can secure a new mortgage with an interest rate that’s at least 1% lower. 1% can be a huge difference, and it can save you hundreds in the long and short term.
As interest rates continue to rise, refinancing may also help you switch to a fixed-rate mortgage to lock your rates in before they get any higher. Fixed-rate mortgages can protect you from future rate increases, unlike adjustable-rate mortgages that go up along with them.
Equity is the difference between your home’s value and how much you owe on your mortgage.
Ideally, you need at least 20% equity in your home before you can refinance it. Refinancing your home to access equity can be helpful to your finances in different ways. You can use the money for emergencies, debt consolidation, capital for a new business, home renovations, and more.
Refinancing your home would typically mean you’re extending the life of your mortgage on your home. If you’re refinancing for another 30-year mortgage, you make 30 more years of payments for that home.
Refinancing may not be good if you’re planning to move to a different city, state, or country soon. You may be considering refinancing to make the most out of your property before you move, but it can hurt your finances more in the long run.
Refinancing your home in Northern VA isn’t your only option!
If refinancing your home in Northern VA isn’t something that will work for your plans, there are other things you can do. Our team has the knowledge and experience to help you make the most of your property.
Are you considering buying or selling a home in the DMV area? We’d love to help you! Please click here for our connect page and we’ll reach out to you promptly.
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