Rates dropped? Should I refinance?
When rates drop, you may have an opportunity to save money. Here are some reasons why a refinancing may make sense for you.
- Secure a lower interest rate. This generally reduces the total amount of interest paid over the course of your mortgage.
- Shorten the term of the loan. This is another way to save on overall interest paid. It will also give you the financial freedom of being mortgage-free sooner than expected.
- Lower the monthly payment*. This option may not save you money in the long run, but it could free up monthly cash flow for current expenses.
- Convert your ARM (Adjustable Rate Mortgage) to a fixed rate. This allows you to “lock in” an interest rate that won’t change. It helps remove the uncertainty of an adjustable rate, which is especially important during times of economic volatility.
- Convert your fixed rate to an ARM. If interest rates are trending lower, you may want to switch to an ARM to optimize market trends. This can be tricky in today’s market, but we can provide guidance on a potential to shift to an ARM.
Before finalizing your decision, it’s important to calculate the break-even point to determine if you’ll save enough money to justify refinancing. We can help you make that determination.
Weigh Your Options
Each homeowner’s situation is unique, so this information is provided as educational information, but is not a one-size-fits-all recommendation. Contact one of our mortgage professionals discuss your circumstances and goals before making a decision.
*Refinancing an existing loan may result in an increase of the consumer's total finance charges over the life of the loan.