This monthly column comes from Arlington Community Federal Credit Union as part of their community financial empowerment mission. Credit unions are member-owned, non-profit cooperatives and anyone who lives, works, worship, volunteers, goes to school, or does business in Arlington, Falls Church, Alexandria or the county. of Fairfax is eligible to join ACFCU. *
Your mortgage and home equity products are probably some of your biggest expenses.
With rates low, many people find it a good financial decision to refinance to meet their financial goals. If you’re thinking about refinancing, here are some reasons to contact your financial institution:
- You are ready to consolidate your mortgage loans: If you got a first mortgage and an equity loan to buy your home, you may be able to refinance the two loans into one and lower your overall monthly payments. Equity loan rates tend to be higher than first mortgage rates, so you can save on the total interest paid over the life of the loan.
- Cash in rfinance: Use the equity in your home to pay for major expenses like home improvement, college, vacations, or to pay off higher interest credit card debt.
- Lower rate and lower payments: Refinance at a lower interest rate to reduce monthly payments and the overall amount of interest paid over the life of the loan.
- Shorten the duration: To build equity faster, reduce the interest paid over the life of the loan. If you’ve owned your home for several years, you can shorten your term and keep roughly the same monthly payment.
- Change product: Many people refinance from an adjustable rate mortgage (ARM) to a fixed rate product. ARM rates are generally lower and are popular for entering a home for the lowest monthly payment. However, with an ARM loan, your interest rate and the resulting monthly payments fluctuate throughout the life of the loan. Many people choose to refinance a fixed rate mortgage so they don’t have to worry about changing interest rates and payments.
If you are ready to explore refinancing, contact a financial institution. The ACFCU real estate team is here to listen to you and advise you on your best options.
* Equal Housing Loan. Membership eligibility conditions apply. Federal insurance by NCUA.