3 Reasons to Refinance Your Home Mortgage in a Rising Rate Environment

Oak Leaf Mortgage - 3 Reasons to Refinance Your Home Mortgage in a Rising Rate Environment

While it seems counterintuitive to refinance your home mortgage in a rising rate environment, there are several scenarios where you may want to consider it. “There will always be a need for refinancing, regardless of current interest rates,” explained Joe LaGiglia, Senior Loan Originator for Oak Leaf Community Mortgage. “Mortgage interest rates are still near historic lows, and are much, much lower than non-secured loan rates.” Here are three reasons to refinance your home mortgage in a rising rate environment.

1. Debt consolidation. “In addition to a mortgage loan, many people have debt that includes car loans, student loans, and credit card debt,” said LaGiglia. “Those interest rates are typically much higher than mortgage interest rates; credit card rates can be over 20%! Consolidating your debt with a cash-out refi of your mortgage loan can bring your overall interest costs way down.”

2. Lower the term of your current mortgage. “If you currently have a 30-year loan, you can reduce the term to 10 or 15 years and typically get a lower rate,” added LaGiglia. “Although your monthly payment will increase, you’ll pay much less interest over the life of the loan. Some clients can save hundreds of thousands of dollars with this option, and their home is paid off much earlier.”

3. Leverage the equity in your home for other important expenses. “As home prices rise and homeowners enjoy more equity in their home, it’s a great time to refinance,” said LaGiglia. “A cash-out refi is a great way to pay for home improvements, college expenses, medical expenses, or other costs associated with life events.”

In the past half-century, history has shown inflation and corresponding interest rates to be cyclical and ever-changing. If you know you will need to refinance eventually, now is the best time to do so, with the option to refinance again in the future if rates decrease significantly. For more information, contact:

Joseph LaGiglia

Sr. Mortgage Loan Originator

630-936-3242

JosephL@MyOakLeaf.com

NMLS ID: 703971