Time to Refinance?

Blog Post Image
Real Estate

Thinking about refinancing your home?

Like anything else, refinancing has its good points and bad. The most common reasons to refinance include: lowering the interest rates or reducing the length of the mortgage, making home improvements, locking in interest rates if you have an ARM or converting to an ARM if rates rise, escaping a mortgage with a balloon provision and no conversion option, and/or consolidating debt. Although refinancing your home might seem the only way, you should become familiar with the current mortgage market before making a move. Contact a mortgage expert to help you make the right decision, one suggestion will be to schedule an appointment with an expert at your banking institution. 

Calculating your savings…

Figure the following to help decide if a refinance is a good idea for you: current monthly payment, the original cost of the home, itemized refinancing costs, monthly payment after the refinance, how long you plan to live in the house after the refinance, the amount owed on the house, and the break-even point (total cost of the refinance divided by monthly savings into payments).

Plan carefully when you refinance:

Close your credit card accounts after consolidating debt. If your reason for using your home equity is to be debt free, is important to close this account right away so you're not tempted to use BORROWED money again. Make a financial plan for the future. Be more discipline with your money and make smart decisions before spending your cash. MONEY DOES NOT GROW ON TREES!

Make home improvements right away.

Oftentimes, some people refinance their homes to make home improvements. Making the correct improvements will increase your home value. If you decide to use your available home equity to improve the appearance of your home, make those improvements right away. Get multiple quotes from contractors and do your own research on the cost for each and all of the improvements you would like to make. Don't procrastinate and risk spending the money for your home improvements on a DREAM VACATION!

Leave some equity in place for your security.

It is wise to leave a portion of your home equity funds in a savings account or open an emergency savings account. In case the unexpected happens, such as a faulty central heat and air unit, or a roof replacement you didn't know you'd have to make. After all, you should wait a few years before you tap into your home equity again. 

If you'll like to discuss more options to use your funds, contact me today! I love helping people with their real estate needs!


Anny Jones, Realtor.



7158 Lee Hwy, Chattanooga TN 37421



Many online “calculators” also provide refinancing data, including http://www.reficenter.com and http://www.smartmoney.com.


Each Keller Williams Realty is Independently Owned and Operated.