Are you thinking about purchasing a new home and refinancing later? If yes, then congratulations on taking this big step in your life! However, you may feel a bit hesitant due to the current interest rates. But don’t worry, there’s no reason to be concerned. The best decision you can make right now is to go ahead and buy your new home before the housing prices go up any further!
Once you have purchased your dream home, you can always consider refinancing your mortgage when interest rates decrease. Refinancing is the process of adjusting your home’s original loan or taking out a new one with better terms and conditions, like lower interest rates. This will help you save money on your monthly mortgage payments, and you’ll have more financial flexibility in your life.
Why You Should Buy Your Dream Home Now Before Housing Prices Increase
Now, let’s dive into the top three reasons why you should consider refinancing your home mortgage:
Lower Interest Rates: One of the most significant benefits of refinancing your mortgage is that you can take advantage of lower interest rates. If the interest rates have dropped since you purchased your home, refinancing can help you get a better rate and save you a considerable amount of money over the life of your loan.
Shorten the Loan Term: Refinancing your mortgage can also help you reduce the length of your loan term. For example, if you have a 30-year mortgage, you can refinance it to a 15-year mortgage. This will not only help you save money on interest rates, but it will also help you pay off your mortgage faster.
Access Equity: Finally, refinancing allows you to tap into the equity in your home. The difference between the value of your home and the amount owed on your mortgage is referred to as equity. You can tap into that equity by refinancing and using the funds for home improvements, college tuition, or any other expenses you may have.
In conclusion, buying a new home may seem intimidating, but don’t let the current interest rates scare you away. By taking the step now, you can secure your dream home before prices increase. And, if you consider refinancing later, you’ll be able to take advantage of lower interest rates, reduce your loan term, and access your home’s equity.
How to Accelerate Your Journey to Debt Freedom Through Refinancing
Are you planning to buy a new home? It’s a significant investment and one that requires careful consideration. The interest rates on mortgages can be high, but don’t worry because they will fluctuate over time. In fact, according to Trading Economics, between 1971 and 2022, interest rates averaged 5.42%, with highs of 20% in March 1980 and a record low of 0.25% in December 2008. Currently, as of January 2023, the average 30-year fixed mortgage is 6.47%. Therefore, it’s important to keep in mind that interest rates can change over time, which presents an opportunity to refinance and lock in a lower payment!
One way to accelerate your progress towards becoming debt-free is by reducing the term of your loan. If you’re currently on a 30-year loan, refinancing may allow you to reduce your terms to a 15-year loan. By reducing your monthly payments, you may be able to pay more towards the principal of your loan each month, which can help you pay off your home faster.
Say Goodbye to Adjustable-Rate Mortgages: Switching to Fixed-Rate Mortgages
If you’re currently using an adjustable-rate mortgage (ARM), refinancing can offer you the opportunity to switch to a fixed 15- or a 30-year fixed-rate mortgage, which eliminates the rate fluctuation of an ARM loan. With a fixed-rate mortgage, you’ll have more stability and predictability with your monthly payments.
If you’re ready to buy your dream home, we recommend contacting one of our preferred lenders, U.S. Bank or Safe Credit Union, to get pre-qualified. By partnering with one of our preferred lenders, you may be able to take advantage of our interest-rate buydowns, allowing you to get an even lower rate on your new home! Remember, you can always refinance later if interest rates decrease, so don’t hesitate to reach out to our preferred lenders to see what you’re approved for.