Refinancing your existing mortgage can have a significant impact on your financial health, for better or for worse. Be sure to consider all options before deciding if a pre-retirement refinance is right for you.
The first thing you need to know before taking this step is that refinancing doesn’t come without a cost. It’s only worth the cost if you come out ahead. Crunch the numbers carefully before making this decision. To verify if you will benefit from a refinance, consult with one of our home loan experts.
The second factor to consider is how long you plan on staying in your home. Financial experts only recommend a refinance for homeowners who plan to continue living in their homes for at least 10 years. Otherwise, it is unlikely you’ll recoup the cost of the refinance.
Here are two possible outcomes of refinancing a mortgage:
- A lower interest rate
- A reduced loan term
Refinancing to a lower-interest loan, one with a shorter term, or a mortgage that offers both advantages together, can offer you several substantial benefits upon retirement.
Here are a few of the reasons you may want to consider a refinance:
- Extra cash flow – Having more liquid assets is the primary reason many pre-retirement homeowners choose to refinance. By switching to a loan with a lower interest rate, you’ll find yourself with considerable monthly savings that can help you live out the rest of your years in financial independence.
- Retire debt-free – If you have more than a decade to go until retirement, refinancing a 30-year mortgage into a 10- or 15-year loan can allow you to retire mortgage debt-free.
- Pay off other high-interest debts – If you are carrying a significant amount of debt, refinancing to a lower-rate loan can be a way to come up with extra cash to consolidate those high-interest balances.
Call 410-272-4000, click or stop by today to ask about your refinancing options. We’re committed to helping you achieve and maintain financial wellness through every stage of life.
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