Fact: People will refinance for hundreds of different reasons. Why? Because it should never be a one-size-fits-all solution. Consider this:
- People refinance to save 0.5%. That makes sense to them.
- People refinance to pay off credit card bills. That makes sense to them.
- People refinance to start a business. That makes sense to them.
- People refinance to pay for college, for themselves or their children. That makes sense to them.
What makes sense to you? Let’s talk about maybe the most overlooked reason — to actually save money on your mortgage.
What is a Good Reason to Refinance?
You want to save the overall cost of what will be the biggest expense of your life: your mortgage. So you are doing it for the interest rate then, right? No, actually it is about the payment. The single most important factor in the mortgage.
Basic math: Let’s say you are two years into a 30-year mortgage. Your monthly payment is $1,122.00 per month. So, what will your mortgage cost you? Well, you have 334 payments left at $1,122.00. That equals $376,992.
Basic math on the refinance: You refinance your home by removing 8 years. Let’s say you keep the same payment since rates are so low. What would 8 years mean when it comes to cash in your bank account? 8 x 12 = 96 payments. 96 x $1,122.00 = $107,712.
That is real money! Imagine saving $107,712.00. That has nothing to do with an interest rate. That is real money staying in your bank account.
What is a Good Reason to Refinance?. There are hundreds of reasons. If saving over $100,000.00 is a good reason for you, then get started today!