If you pay close attention to the economy, you probably know the housing market is not looking too good right now. Indeed, according to reporting from CNBC, homeowners have lost a collective $1 trillion in equity during the last six months. This is because home values have fallen roughly 2.6% nationwide.
While the current housing situation may have convinced you not to refinance your mortgage tomorrow, eventually doing so may be on your radar. Still, there are both good and bad reasons to refinance a mortgage. Here are three of the good ones.
1. Better loan terms
Arguably, the most beneficial time to refinance a mortgage is when you can secure better loan terms. Whether you can lock in lower interest rates or secure a more appealing payoff schedule, it makes sense to keep an eye on your refinancing options.
2. An influx of cash
If you are drowning in a sea of debt, your home equity may be the lifeline you need to rescue yourself. That is, provided you can negotiate beneficial terms, it might be a good idea to tap into your home’s value to pay off high-interest credit cards or other debts.
3. A more comfortable residence
Even though you love your house, it has some aspects that do not mesh with your lifestyle. If you want to expand your home’s square footage, renovate a room or build a garage, refinancing your mortgage might be helpful. Nevertheless, you should be careful not to undertake renovations that do not add value to your property.
Ultimately, by keeping both interest rates and your financial well-being in mind, you can probably pick the right time to refinance your mortgage.