Mortgage interest rates may be at their highest levels of the last four years; however, it is not too late to find good mortgage deals.
Mortgage interest rates have been rising due to high energy costs and economic uncertainty due to inflation. Despite these increases the mortgage industry is still booming. Why refinance or take out a mortgage when interest rates are rising? There are still excellent mortgage deals to be found; you just need to spend the time doing your homework and shop for the best mortgage deal.
Here are common reasons for refinancing; even while interest rates are on the rise.
Home Equity Lines of Credit
If you have maxed out your home equity line, refinancing and paying off that debt could save you money. Home equity lines come with variable interest rates and recent interest rate hikes are likely to wreak havoc on your monthly payments. By refinancing and cashing out you can pay off your home equity line and secure a fixed interest rate for that debt.
Combine Your First and Second Mortgages
If you are carrying two mortgages you can simplify your life and possibly save your pocketbook by consolidating the mortgages. By refinancing you can pay off the second. Interest rates are still low enough to make refinancing worth your while.
Lock in a Fixed Interest Rate
Adjustable rate mortgages are high risk loans compared to traditional fixed rate loans. If you financed your home with an adjustable rate mortgage and are nearing the end of your introductory period your monthly payments will go up dramatically. This is also true if your lender will be adjusting your interest rate soon. By refinancing to a traditional fixed rate mortgage you are minimizing your risk and can still lock in a low interest rate.
Pay for Repairs and Renovations
Lastly, a cash out refinance can save you money over a home equity loan. Interest rates on home equity lines of credit are much higher than traditional mortgages. Improvements made to your home after refinancing can contribute to price appreciation in the value of your home.
Even though interest rates are rising refinancing still makes sense if you do it smartly. As a homeowner you need to do your homework and shop around for the best deal on your mortgage. If you skip this step, how will you know what a good deal on a mortgage is?
To learn all you need to know about refinancing your mortgage sign up for a free mortgage guidebook.
To get your free mortgage guidebook visit RefiAdvisor.com using the link below.
Louie Latour has twenty years of experience in the mortgage industry as a mortgage broker. He is the owner of Mortgages Refinance Advisor, a mortgage help site devoted to saving homeowners money with a free guidebook