Refinancing a mortgage and getting cash back is something many homeowners have taken advantage of. That’s because on top of getting extra cash as one option, a mortgage refinance can help you lower your interest rate, reduce your monthly payment, shorten the term of your loan, and transfer from a variable rate to a fixed rate which gives many homeowners peace of mind in these uncertain times.
There are so many reasons that homeowners choose to refinance their mortgage. However, there are many homeowners that don’t because they aren’t sure where to start or how to find the best options. In this blog, we will provide the top tips that will help you with refinancing a mortgage and getting cash back.
Refinancing a Mortgage and Getting Cash Back Tips:
1. Ignore the 1% Rule
Many people used to believe that refinancing wasn’t worth it if you didn’t save 1 percent (at the very least) on your interest rate. However, nowadays it’s more important to save as much money as you can rather than only if you’ll save the 1 percent or more.
If you’re interested in refinancing, but not sure if it’s worth it financially then you should find the breakeven point. To do so, take the total closing cost and divide it by your total monthly savings. For example, if the closing cost is $5,000 and save $200 per month then in 25 months it will break even and you’ll start to save money.
2. Anyone Can Refinance
Refinancing isn’t just for people that have owned their home for a couple of decades. It can be a great option for anyone that’s just looking to save on money. Even for people who are looking to flip the home in a year or two.
If you’re looking to flip your house after a couple of years then you should just calculate how much the closing costs would be in relation to how much you’d save. You want to make sure you hit the breakeven point early enough on so that you can make money on the flip.
3. Keep Your Options Open
It’s okay to speak with multiple lenders to ensure you’re getting the best deal. You want to make sure you’re paying the lowest amount possible each month so you’re meeting the end goal and saving.
Also you aren’t stuck with the same bank or mortgage lender forever. So if you want to look into other options even after you picked a company, it’s completely okay to keep your options open and find the someone else that better suits your needs.
4. Use a Mortgage Savings Calculator
It’s always a good idea to get quotes and find out how much you can save with a refinance. That’s why it’s so helpful to use a mortgage savings calculator, which helps you determine if a refinance is right for you and how much you can plan on saving.
It also helps to determine the exact amount you can expect to save before you reach out to lenders. This will help you during a negotiation with a lender and allows you to go in knowing you budget.
Get Started Today
Give Trusted House Finance a call today and see how much you can save on a mortgage refinance. Our team of trusted professionals are experts in the refinancing and mortgage industry. We can help you better understand the process and help you find the best rates that align with your goals.