The process of refinancing a home involves paying off the existing mortgage with a new mortgage, usually one that has a lower interest rate or provides homeowners with extra cash. Typically, there is some benefit to refinancing that would make the process of appealing to homeowners.
Should you refinance your home? Here is what you could get out of it if you do, when you might consider doing it, and if you need a lawyer.
Although the process of refinancing your mortgage can be time-consuming, many homeowners stand to benefit from it. There are many different reasons people may choose to refinance their home, including but not limited to the following:
To secure lower interest. If you are able to secure a new mortgage with a lower interest rate and use it to pay off a loan with a higher interest rate, this can save you significantly more money on interest over the long-term.
To reduce the amount of time until your mortgage is paid off. For example, if you have 20 years left to pay your mortgage, you can shorten the time by taking out a new mortgage for, say, 10 years and using the money from it to pay off the old home loan.
To obtain a lump sum of money to cover a large or unexpected expense, such as medical treatment or a new addition to the family. When you have enough equity in a home, you can usually take out a new mortgage for more money than what you owe on the existing mortgage, leaving you with a lump sum of money left over. This money can be spent at your discretion.
To change the type of mortgage you have. If you have an adjustable rate mortgage, for example, you may want to take out a fixed rate mortgage and pay the adjustable one off.
Ideally, you should only refinance your mortgage when you can benefit from doing so or if you absolutely have to. If you are in a situation where you do not need a lump sum of money and you are not getting much benefit out of your refinancing options, it may be better to delay taking out a new mortgage.
You may only want to go through the process of refinancing your mortgage if you will make substantial gains from it. For example, you may not want to refinance your home if your new mortgage will have only a 1% lower interest rate, but a 2% lower interest rate could make the process worth it.
In South Carolina, you must have a lawyer handle the closing of a mortgage. This is because the state considers it a legal practice that must be performed by a licensed attorney.
Contact Susan Shipman Miranda, Attorney at Law, today for a consultation. Our office is available to schedule your consultation to discuss closing your refinance.
We are here to help! Give us a call at 864.760.0221 or email us at orders@smirandalaw.com. We look forward to hearing from you!
