With loan rates at a near-record low, you may wonder if now is a good time to refinance. The answer is, it depends. There are a few things that you should know and consider about refinancing to help you decide if refinancing is right for you:
There are different types of home refinancing.
Rate and term refinance
When available rates are lower than your current rate, refinancing can be a way to save money by reducing your monthly payments or adjusting the term of your loan to pay it off quicker. Refinancing can also allow you to change your loan program (e.g., a 5-year adjustable-rate mortgage to a 30-year fixed) for long-term stability.
A cash-out refinance means that you’re increasing your loan amount to pull out cash, using some of your home’s equity. The benefit of this is that your refinance interest rate will likely be less than the interest rate of a personal loan. On the flip side, a larger loan amount will prolong loan amortization.
It is important to note that all home refinances require home equity, which means that your home is worth more than the balance of your existing loan.
Refinancing is also available for car loans.
If you qualify for a lower loan rate than your current loan, then it may be an excellent time to refinance your car. Like refinancing your home, an auto refi can save you money by reducing your monthly payments or term of your loan.
Before initiating a refinance, you should be clear about your financial goals and what you aim to accomplish.
AHFCU offers competitive rates for both home and auto refinancing. You can call us at 562-933-0370 to learn about the refinance options available to you. You can also apply for a refinance here.