Are you currently standing at a fork in the road, indecisive about whether refinancing your mortgage or selling your home will be the better deal?
You might have heard that interest rates are much lower at the moment, and would like to make use of this opportunity and refinance.
Granted, this will give you the chance to reduce the lifetime of your loan, as well as allow you to renegotiate for a lower interest rate to cut back on your monthly mortgage payments.
However, in the case of your home’s value, if it has increased since you acquired it, it will make more financial sense to rather sell your home.
Nevertheless, whether you decide to refinance your existing mortgage or sell your home, your credit, debt levels and current income are all the determining factors in the kind of loan you will qualify for next.
What You Need To Consider Before Deciding
What are the pros and cons to consider here?
Refinancing your existing mortgage basically means that you will be able to pay it off, but it will be replaced with another new loan. Best case scenario, this new loan may have better interest rates and more attractive terms than the previous one, but on the other hand, it may not.
Banks will structure your rates according to your credit and current income. So, if you are retired, for instance, and don’t have a large sum of cash to show, it will be a lot less beneficial to opt for the refinancing option.
In case you do measure up to the qualifications and are able to get a much better deal, the same question may still remain…
Will refinancing or selling be best for me financially?
The upside of selling your home for a profit will be that it will enable you to buy a new property, which can work out to be the better option for most.
However, to sell or refinance, you will need to get a new mortgage and qualify for a new loan in both cases, and the fact of the matter is that there are always additional costs incurred when getting a new mortgage.
These expenses include closing costs on your existing mortgage, lender fees and mortgage insurance, as well as upfront fees for the new loan.
These are all things you need to consider before you can compare options and decide which one will save you the most money in the end.
So, Should I Refinance Or Sell?
Each person’s financial position and current mortgage structures are different and unique to the next one.
Therefore, the best option for every individual will differ depending on various factors that will need to be weighed and taken into consideration.
So, whether selling your home or refinancing your mortgage will financially benefit you the most, it will have to be looked at from an individual level.
You might ask: “How will I know which option will be best for me?”
If you are uncertain and would like to make the best decision possible, be sure to seek out help from refinancing experts and consult with reputable real estate agents as well.
It is important to receive assistance in analyzing whether, in your unique case, the savings from refinancing or potential profits from selling in your specific area, will be the most advantageous.
We at Reddtrow Properties are also able to help you in making the smartest personal financial decision concerning this matter. Contact us at any time for any assistance you may need!