Should I Refinance my Home?
Lower your mortgage rate and payment
This is one of the most common reasons that homeowners refinance their mortgage. If your current interest rate is higher than what is currently available, it's probably a good idea to see how much you could save by refinancing. A Mortgage Planner can help you decide.
Market conditions may provide you the opportunity for a favorable change to the rate and term of your current your mortgage loan. With the guidance of a professional mortgage planner at Blackhawk Bank, you’ll learn to understand when and why the market conditions could be appropriate for a re-fi.
At Blackhawk Bank, we offer many types of mortgage refinancing options along with reliable advice. Our goal is to make mortgage refinancing as affordable, easy, and as fast as possible.
Reduce your term
Take advantage of low rates to reduce the term of your Mortgage loan. Shorter terms mean lower rates.
Change Your Type of Loan
An adjustable rate mortgage (ARM) can be advantageous for lower payments initially, and are sometimes used when a buyer’s plan is not to remain in the home long-term. However, if you decide to stay in the home, you may want to switch to a fixed rate loan. This allows you to lock in the rate and protects you from rising interest rates for a set period of time.
Lower Your Mortgage Rate and Payment
If current interest rates are lower than when you got the initial loan, it may be an excellent time for you to consider refinancing. This could save you a significant amount of money over the life of the loan. And, lower rates could drastically lower your monthly payment.
Convert your adjustable rate into a fixed rate
Adjustable rate mortgage (ARM) loans are a great way to ease into your payments, especially if you're a first time buyer, or if you need lower payments initially.
Eventually, if you decide you will stay in the home longer, you may want to consider refinancing into a long term fixed rate loan. Doing so will give you peace of mind, knowing that your rate and payment will not change for a set period of time
Convert your interest-only loan into a fully-amortized loan. Like ARMs, interest-only mortgage loans are a great way to minimize payments at the beginning; however, because you are not paying any principal, your loan balance does not decrease.
If you plan to keep your home long term, you probably want to start paying off your loan. Often, you can refinance your interest-only mortgage loan to a longer-term fixed mortgage loan while keeping your payments about the same.
Remove mortgage insurance
If you purchased a home with less than 20% down, chances are you're paying private mortgage insurance (PMI). If your home’s value has increased and/or you’ve paid down your balance, refinancing can help you eliminate the extra expense.
Refinancing will help you eliminate the extra expense if you've paid down your balance and/or have seen an increase in your home's value to a point where you have at least 20% equity in, or a loan-to-value (LTV) of 80% or less.
Convert to a shorter-term loan
Sometimes plans change and the home that you thought you were going to have for awhile turns from a permanent situation into a temporary one.
Refinancing gives you the opportunity to consider a shorter term for the life of your loan. Short terms mean lower rates, and can save you many thousands of dollars. A Mortgage Planner can help you decide.
Use Your Home’s Equity to Your Advantage
Home values are on the rise as the market continues to improve, and thus, so is home equity. Using your home’s equity is a great way to pay for home improvements, to purchase investment property or pay off an interest only loan.
If you have a lot of high-interest debt, you may want to leverage your home’s equity and put it work for you. Home equity loans are typically low-interest, and may be tax deductible.
Consolidating debt gives you the benefit of having only one payment, and can also decrease your monthly outflow.
Always consult a tax advisor.
Take cash out to consolidate your debt
Leveraging your equity is one of the smartest ways you can make your money work for you. Use the cash to pay off higher interest, non tax-deductible credit cards, student loans, or medical bills.
By consolidating your debts, you can enjoy the benefit of having only one payment each month, and in most cases your overall monthly outflow decreases.
Take cash out for home improvements
What better way to use your hard earned equity than to invest it back with repairs or home improvements?
Whether you would like to fix your leaky roof or update your kitchen, you can tap into your equity and have a potentially tax deductible* way to tackle your projects. *Consult with your tax advisor.
Take cash out to purchase investment property
With home prices and interest rates at the lowest they've been in years, if you've been thinking about buying a vacation home or an investment property, now may be a great time to take action.
Tap into the equity and use the cash for your down payment, home improvements, or for any reason at all.