Kathy Muni/Special to Colorado Community Media
Our debt had been growing over the years as we financed three weddings and put multiple children through college. Being able to refinance our home and pay off the high-interest credit cards was a blessing. It not only simplified our financial lives, it saved us money! ~ KC
Many homeowners are in a similar situation. When they become aware of the high interest rates they are paying on personal debt such as car loans, credit cards, and student loans the interest rates can be much greater than doing a refinance of their home mortgage. The average interest rate for credit card debt at the end of 2018 was 16.71% while the average 30-year mortgage rate was 4.3%.
The average American household carries about $16,000 in credit card debt, approaching $30,000 in car loans, and many 10’s of thousands of dollars in student loans. The savings in interest can be significant. The difference between the credit card debt (16.71%) and the average mortgage rate in the 4%s is over 12% in savings!
Doing a cash-out refi can help solve this problem of overwhelming debt. A refinance allows you to tap into the equity tied up in your home putting it to work for you. When you refinance and access some of your money, you may use it for any purpose. Many pay off debt, which means optimizing their finances. Others want to do upgrades to their home, take a vacation, buy an investment property or pay for a wedding. The choice is yours!
Some of our clients save $100s and even $1,000s per month restructuring their debt by refinancing.
If you are concerned that your mortgage will start over at 30-years, we have programs that offer flex terms, so you can keep your current term. We can do just about any term between 10-30 years. If you want 23-, 18- or 12- years, we can do it.
If you currently have mortgage insurance, you may be able to eliminate that portion of your payment if your value has increased enough in the past few years.
Refinancing is an easy process and can have the added benefit of boosting your credit score when all is said and done. If your cards are maxed out or are higher than the recommended 30% usage, paying them off with proceeds from a refinance can help your credit score.
Also, if you have an FHA loan, refinancing has never been faster or easier with an FHA Streamline. You can lower your monthly mortgage payments - in some instances, even if you owe more than your home is worth. No appraisal is required, rates are low, and there is no income documentation required (W-2s and pay stubs). The benefit to you must be at least a 5% drop in your mortgage payment, and there are 15-, 20-, 25-, and 30-year terms available, with Primary Residence and Non-owner Occupied properties allowed.
An FHA Streamline can lower your monthly mortgage payment as well as your interest rate. If you have not refinanced since HUD lowered the MIP in 2015, now is the time! You may also be able to refinance out of an FHA loan, if you qualify for a Conventional loan eliminating the mortgage insurance, assuming your home value has increased enough.
The VA has a streamline process to lower your rate. You can also take advantage of this rising real estate market using a VA cash out refinance with a loan up to 100% of the current value.
Interest rates are still at historical lows, but may be set to rise soon.
Silver Leaf Mortgage is a broker, which means that we can seek out the very best options for you offered by a variety of lenders whether you are self-employed, or W2. Our loan officers have years of experience and will work closely with you to be sure that the refinance loan you select will best meet your needs.
KATHYMUNI REVERSE MORTGAGE SPECIALIST NMLS #1368981
Silver Leaf Mortgage in Centennial, CO. Direct: 720-458-4041
KathyM@SilverLeafMortgages.com | NMLS# 1394377
