Refinance
The 2% Rule Many CPA's across America advise their clients to
refinance their present mortgage when they can reduce their
interest rate by at least 2%, and/or shorten the term remaining
to pay off the mortgage.
Reasons to Refinance
There are many good reasons to refinance your current mortgage,
or get a second mortgage and pull equity out of your home. Here
are just a few.
1. Adding structural additions or improvements to your home.
2. Get a lower mortgage rate and reduce interest costs.
3. Obtaining funds for investment
4. College tuition for your children. 5. Paying off other debt,
such as credit cards, in order to reduce your total monthly
outlay.
Consider The Following
When selecting a Home Improvement Loan consider all of the
following:
1. Minimum & Maximum loan limits.
2. Terms (The shorter the term the lower the overall finance
charge/higher monthly payment, longer the term the less the
monthly payment/the greater the overall finance charge).
3. Loan type's: Home Equity, HELOC's, FHA 203K, Cash Out
Refinance, Secured Consumer loans such as Retail Installment
Obligation (RIO's), and Unsecured RIO (loan terms from 12
months).
4. Interest Rate and loan costs. For example: A no closing cost
HELOC at prime or prime plus 1/2 may be tax deductible, and may
be used to draw upon for FUTURE Home improvement projects with
no "out of pocket" loan charges.
Improving your home can increase its value. Investing wisely
can help create a larger net worth. Both could pay off in
retirement benefits for you. Be careful. Don't risk the security
of your home on frivolous spending.