Your home: Is it still a good time to consider refinancing in NEJC?


By Chad Taylor

Question: Should I refinance my home? How much could I save.

When interest rates dropped so low, and the housing market was declining, refinances were the hot topic. Now that the market is in a state of recovery, it seems that “refis” have lost their spot in the limelight.

The Taylor Made Team

But now is still a great time to refi — for most homeowners. I say most because there are a few general rules to follow if you are considering a refi.

Most lenders would tell you that you need to plan to stay in your home for at least two more years if you are considering a refi. There are closing costs that a homeowner must pay when refinancing, so it is important to make sure that you will recapture the cost and then see some savings before making the investment.

Also, if you purchased in 2005 or 2006 before the market declined, there is a chance that the market value for your home today is not as much as you paid for it back then. That could stand in your way when it comes to refinancing. Just like when you purchase a home, the lending institution will perform an appraisal on your home to insure that it is worth the refinanced amount. If you did purchase around that time, you should probably first contact a Realtor to perform a preliminary market analysis for your home. He or she should be able to give you an idea as to whether a refi might be an option or not.

Now, the up side. A lower interest rate can make a huge impact in your payment and overall equity position. For example, let’s say that you have a mortgage on your home of $240,000 and your current interest rate is 5.25 percent. If you were to refinance today into a 30 year conventional loan, you would save approximately $25,000 in the first eight years between interest savings and equity improvement. Yes – I said $25,000! That is not to mention what would happen to that $25,000 it it were then invested elsewhere: a 529 plan for your kids college education, down payment for an investment property, etc…

If you are considering a refinance, I would like to make an endorsement. Jim Yarrington with Peoples Bank has been a long time partner of ours. He handled our refinance on our first home, and the home purchase loan on our current home. Not to mention that our clients love him. If you would like to make an application for a refinance, just got to ApplywithJim.com. It is a very user-friendly site and I am confident that Jim can provide you with the best options for you and your family.

This weekly sponsored column is written by Chad Taylor of the Taylor-Made Team and Keller Williams Realty Key Partners, LLC. The Taylor-Made Team consistently performs in the top 3 percent of Realtors in the Heartland MLS. Please submit follow-up questions in the comments section or via email. You can find out more about the Taylor-Made Team on its website. And always feel free to call at 913-825-7540.

 

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