Metro Brokers Financial

Refinancing Options

Homeowners who want to refinance have several options. Refinancing is a way for homeowners to get money out of their home, lower their interest rate, extend the loan repayment period or even consolidate debt.

Lowering Your Interest Rate

With historically low interest rates, many borrowers are looking to lower their monthly payments and reduce the interest expense on their homes.

Lowering the interest rate could potentially save you thousands of dollars in interest over the life of the loan.

For instance, let’s assume you have a 30-year fixed rate loan for $300,000. With an interest rate of 7%, your monthly payment would be $1,995*. If you refinanced at a rate of 5%, it would drop to $1,610 a month**. This is a savings of almost $400 per month or $144,000 over the life of the loan!

Cash Out Refinancing

Many borrowers may not realize that they qualify for a Cash Out refinance. There are several options currently available.

A Cash Out refinance allows homeowners to refinance their existing mortgage. The cash may be used for debt consolidation, home improvements or paying off subordinate liens (i.e. second mortgage or equity lines of credit). This allows the homeowner to access the equity they have built up in their home and put it to good use where needed.

This is especially useful when sending children to college, buying a second home, or making essential home improvements.

If your property has significantly increased in market value since you purchased it, or if you have a considerable amount of equity in the home, a Cash Out refinance might be a good idea.

Consolidating Debt

Some choose to refinance to consolidate their debt. This is a great option for homeowners with credit card or other debt with high interest rates.

There are several benefits to consolidating debt by refinancing your home loan. When refinancing your debt into a home loan, it doesn’t increase your debt. It doesn’t add any money to what you already owe, it just moves the debt.

In addition, homeowners will realize a much lower interest rate on their home loan than on a credit card. Plus, the interest on your home loan may be tax deductible. Be sure to consult your tax professional.

Metro Brokers Financial suggests that homeowners only refinance once. Although it may seem like a good idea to refinance whenever the interest rate hits an all-time low or you max out your credit card, the closing costs to refinance will add up and end up costing you more money over time.

If you have any questions, contact a Metro Brokers Financial loan officer at 404.847.2525.

*This is based on a loan to value ratio of 90% or 10% down, an Annual Percentage Rate of 7.157% with 360 monthly payments.
**This is based on a loan to value ratio of 90% or 10% down, an Annual Percentage Rate of 5.139% with 360 monthly payments.

Metro Brokers Financial, Inc., 5775-D Glenridge Drive, Suite 200, Atlanta, Ga. 30328 A Georgia Residential Mortgage Licensee # 5892. NMLSR Unique Identifier # 163853. 404-847-2525