5 Reasons to refinance
1. Lower your interest rate
We have been experiencing record-low interest rates in 2016. Lowering your interest rate can save you thousands of dollars per year. It reduces your monthly payments, which allows you to have more financial freedom. Our KMG Hawaii loan officers are experts at pre-qualifying you for a lower interest rate. Make sure to contact us before the rates increase.
2. Consolidate your debt
Credit cards and personal, college, car, and other non-mortgage loans can carry very high interest rates. To make matters worse, most of those types of interest rates are not tax deductible.* By refinancing your mortgage, you can bundle other debts and make only one payment with a low interest rate.
* Contact your tax accountant for more information.
3. Pay off your mortgage faster
Refinancing to a shorter term allows you to pay off your mortgage faster. There is a misconception that shortening a 30-year mortgage to a 15-year term doubles your monthly payments. The shorter term will give you a lower interest rate, allow you to own your home sooner, and save you a bundle of your hard-earned money.
4. Get out of an ARM
An ARM is an adjustable rate mortgage. There are different terms for ARMs. For example, a 1-year ARM has a fixed interest rate for 1 year, then an adjustable rate for the remaining term of the loan. A 10-year ARM has a fixed interest rate for the first 10 years, then an adjustable rate for the rest of the loan. You can take control of your interest and have peace of mind by converting your ARM into a 15-year or 30-year fixed-rate loan.
5. Get cash from your home equity
Turn your home equity into cash for home improvements, to pay off or consolidate debt, or for any other reason. There are several options for getting cash from your home equity. Make sure to speak to your KMG Hawaii loan officer for more details.
Is refinancing for you?
Homeowners refinance their home mortgage for the following reasons:
- To lower their interest rate (reduces monthly payments or reduces the term)
- To consolidate other debt(s) into one loan (merge high-interest credit cards or other loans into a lower interest rate)
- To reduce the monthly repayment amount (often for a longer term, contingent on interest rate differential and fees)
- To switch an ARM to a fixed-rate loan
- To get cash from their home equity