When we started Copperline, we wanted to do something different than what we’d experienced before working as financial advisors. We genuinely feel that if you are going to pay us for financial advice that we should be able to offer you advice that touches on all major financial aspects of your life.
What if your financial advisor actually advised on both sides of the balance sheet? We do that. Here is another example of why it’s important.
Mortgage rates have continued to fall. Due in part to global factors driving uncertainty, mortgage rates are near lows that haven’t been seen in quite some time. According to a recent article by CNBC, the average 30-year mortgage is about 2.92% while the average 15-year loans are about 2.48%. These rates are incredible. If you’ve been looking at the potential of a refinance, now may be the time to do it.
Now, there are quite a few factors that go into deciding whether or not to refinance. Here are a couple.
- How long do you plan to stay in your home?
- Is your rate high enough to warrant the costs of refinancing?
- Is there enough equity in your home?
- Is your credit score “refinance worthy”?
According to ValuePenguin, the median duration of homeownership in the U.S. is 13.3 years. This is important when thinking about the potential to refinance. If it is likely that you’ll move in the short term, a refinance may not be right for you. Basically, you need to calculate, or have your advisor calculate for you, your breakeven point. This is important because refinancing isn’t free. If you won’t be in your home at least long enough to reach the breakeven point, you should not refinance.
If you might be in your home for several years, you should be looking at your current rate and the rates available in the market place. Often times it may be smart to refinance.
The difference in interest for a 30-year mortgage at 4.5% and a 30-year mortgage at 3.5% is $51,877!! Savings like that could equate to a lower monthly payment or a shortened term so you can pay it off quicker.
At the end of the day, even if refinancing may not be the right thing for you now, having a conversation with your advisor is a good idea. See where you sit financially and get help from a professional managing both sides of your balance sheet.
Questions? Just call – 307-586-1880. You can also find us on social media.
