With record-low interest rates, many people are considering refinancing their mortgage. However, low rates aren’t the only reason for refinancing a home loan these days. Here are several other good reasons to think about a new home loan:
Refi for a lower rate: This is the number one reason to refinance. However, a lot of people haven’t taken advantage of these record low rates.
Convert an ARM: A lot of people are getting rid of their adjustable-rate mortgages for fear of inflation. Instead, they refinance into fixed-rate loans to secure more stable rates.
Get a mortgage on a paid-off house: If you’ve paid off your mortgage, consider taking out another mortgage to put a little cash in your pocket.
Cash out to consolidate debt: There are still some options for cash-out refis, but the craze ended when the housing bust began. People are using the money to pay down debt rather than buy expensive items.
Cash out to buy other property: An interesting trend has people taking money out to purchase other properties. However, investment properties raise some unexpected tax and mortgage issues.
Consolidate two mortgages: Even if their rates are relatively low, a lot of people are refinancing to get rid of them. They fear rates might jump in a few years and don’t want to be tied down to those rates.
Address family matters: Divorces often lead to refis as a means of removing the absent former spouse from the note.
For more information on whether a home refinance makes sense for you, visit Fox Business.