When to Refinance Your Home

When is it a good idea to refinance? It depends on your financial situation and what you’re looking to get out of refinancing.

Here are some common scenarios where refinancing your mortgage makes sense.

Lower Your Interest Rate

One of the most common reasons to refinance a home is to lower the interest rate.

If you are able to find rates that are 1.5%-2% lower than you are paying now, it may be worth thinking about. Keep in mind however, that when you refinance you will need to pay closing costs and possibly extend your loan terms.

Refinancing could actually lead to higher monthly payments than you have under your current terms, so do the math beforehand.

Make Your Monthly Payment More Affordable

If you are having trouble making your monthly payment and aren’t as concerned about paying more over the life of the loan, refinancing may be a good option.

You can lower your monthly mortgage payment by extending the loan terms. While it’s not advisable from an investment perspective, sometimes affordability is the most important factor.

Build Equity Quickly and Pay Off Your Mortgage Sooner

For people who have no problem paying their monthly mortgage payment, refinancing to shorten the loan term is a great way to quickly build equity.

It will also enable you to pay off your mortgage sooner, with less interest. Of course, since you’re paying off the same amount in a shorter period of time, your monthly payment will be higher.

Change Your Loan Type

Adjustable-rate mortgages (ARMs) typically have interest rates that start off low and increase over time.

Depending on your situation, you may be interested in changing your loan from an adjustable-rate mortgage to a fixed-rate mortgage before the interest rate increases. Refinancing will enable you to make this change.

While this may seem like a great idea, make sure you compare the closing costs with how much you will save over the life of the loan. If you’re going to be in the house for at least a few more years, changing your loan type will usually work out in your favor.

Consolidate Your Debt

Have you taken out a home equity line of credit (HELOC) on your home? If so, refinancing is a great way to consolidate your debt.

Combining your HELOC with your mortgage will make things simpler by giving you only one payment and one interest rate.

If you find yourself in any of these situations, refinancing may be the way to go.

To learn more about the ins and outs of refinancing, contact one of our mortgage specialists at a branch near you.

Share:

Sign up for our newsletter and be the first to know about new tips, insights, and products from First Bank.

First Bank may use this email address to contact you about products, services, and promotions.

You may be interested in...

Education Savings Account – North Carolina College is expensive. The cost of tuition, housing, books, food, and transportation starts to add up. The cost of going to college has gone up by over 400% since the 1970s. The average college student’s debt is $37,172. Don’t get bogged down with student or parent loans. In North Carolina, a First Bank education savings account can help you save for college. Start A Savings Account for Education at First Bank in North Carolina North Carolina is home to some of the best universities in the country, like N.C. State, UNC Chapel Hill, Duke, Elon, Eastern Carolina University, and Wake Forest. You shouldn’t have to miss out on the great education North Carolina has to offer because of the high costs. First Bank understands the importance of education. Our education savings accounts can help you prepare for your future and achieve your career goals. Everywhere Savings – Our Everywhere Savings account is a great option for anyone who wants to start saving for college. MyFirst Savings – It is never too early to start saving for your education. First Bank customers under 18 years of age can open a MyFirst Savings account with only a $10 initial deposit. Money Market – First Bank’s Money Market account is a good option for parents or young adults who can put down a little more money to deposit. CDs – A certificate of deposit may be a good option for parents or students who do not need immediate access to their funds. CDs usually earn interest at a higher rate, and are FDIC-insured.* All of our accounts come with free online and mobile banking services.** First Bank makes it easy for you to manage your account from virtually anywhere. Contact or visit your local First Bank to speak with one of our experts about the best education savings account option for you. With over 80 locations in North Carolina, it is easy to find a First Bank near you. *CDs are subject to penalty for early withdrawals prior to maturity date. Penalty will reduce earnings. Investment and Insurance Products are NOT Bank Deposits, NOT FDIC-Insured, HAVE NO Bank Guarantee, NOT Insured by any Federal Government Agency, May Go Down in Value. **While First 3 min read

Join Us: the 12 Days of Giving This holiday season, First Bank team members across the Carolinas are participating in the 12 Days of Giving. Small acts of kindness can make a big difference, and we'd love to invite you to join us. This handy list has some ideas to get you started. 1 min read

Simplifying the Home Buying Process The home buying process can be daunting, especially for first-timers. When should I start looking? How much do I need for a downpayment? Fear not! We've got you covered. 1 min read

Need Online Payroll Services Nearby? Trust Your Local First Bank Going green isn’t only good for the environment. If you’re a business owner, turning your business into an eco-friendly venture could help you save money and attract more customers. By cutting costs in certain areas, you can spend more money focusing on things like marketing and employee growth, or just make more of a profit. Customers also love to support green businesses, and it could help your reputation to show that you care about more than your own personal success. If you own a business and want to make it more environmentally friendly, switching to online payroll services is a good place to start. Eliminating paper checks and the need for a bookkeeper can help you cut down on paper costs and save a few trees in the process. If you are ready to make the switch, you may be looking for online payroll services near you. Look no further than First Bank. We offer a variety of online payroll services sure to meet the needs of you and your business. Reduce Your Business’ Carbon Footprint With Top Payroll Companies Near You End your search for online payroll services near you at First Bank. We offer a Payroll Direct Deposit service, as well as Everywhere Electronic Payments that enable you to cut costs and reduce your carbon footprint. With First Bank’s Payroll Direct Deposit services you won’t have to play your employees by check. You will be able to deposit pay directly into their checking or savings accounts. You can also use Direct Deposit to expense reimbursements, pension payments, dividends, and other disbursements. Everywhere Electronic Payments give control of your funds until the exact moment you need them. Electronic payments can also be used to disburse funds like direct deposit of payroll, expense reimbursement, royalty payments, or vendor payments. When you provide information electronically, you will reduce the time and expense of writing, processing, and reconciling checks. Lessen your impact on the environment by visiting a First Bank branch today. We have nearly 100 locations in North Carolina and South Carolina, making it easy to find online payroll services near you. ——— Sources: USA.gov: http://www.usa.gov/topics/environment-agriculture/going-green-tips.shtml 2 min read

When to Refinance Your Home

Ready to talk to an expert?

Lower Your Interest Rate

Make Your Monthly Payment More Affordable

Build Equity Quickly and Pay Off Your Mortgage Sooner

Change Your Loan Type

Consolidate Your Debt

Ready to talk to an expert?

You may be interested in...