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Even If You Aren't Selling Your Home, You Can Take Advantage Of This Market



As a real estate team, we believe in home ownership. And when you are ready to buy or sell a home, we want to be the team that helps you. But sometimes our clients aren't ready to move.


In fact in recent years, we've helped dozens of clients purchase a home who may not be ready to move again, but still may be able to take advantage of the booming local real estate market by reconfiguring their mortgage.


Southern Indiana mortgage expert, Brad Sea of Kentuckiana Mortgage Group, shared "We are seeing a trend that many people are refinancing right now in order to eliminate their Private Mortgage Insurance which could save them money every month and/or to use some of the equity they have built up to improve their current home."


Here are some of the possible benefits of refinancing you should consider:



1. A better mortgage rate - As rates have generally fallen over the last few years, you may be able to lower your mortgage rate. Even a small reduction in the rate can save you thousands of real dollars over the life of a 30-year or even 15-year mortgage.


2. Lower monthly payment - A mortgage payment amount is determined by the rate, the balance of the loan, and the length of the term. If you have paid down the balance of your mortgage from when it first started and you can layer a lower rate on top of that, then your payment should be reduced if financed over the same period as the original loan. This will put extra dollars in your pocket each month to put towards other expenses.


3. Shorten Your Payback Period - Some people want to pay off their mortgage sooner. If that's the case for you, you can choose to refinance to a shorter term mortgage. The most common example is people who originally took out a 30-year mortgage and then refinance to a 15-year mortgage. If the original balance has been paid down and you can get a lower rate, then your overall payment amount could stay about the same, however more of each payment will go to the principal balance allowing you to payoff the loan faster.



4. Cancel Mortgage Insurance - Some mortgages come with Private Mortgage Insurance or PMI. This is an added cost to your monthly payment that can range from a few extra dollars per month to hundreds of extra dollars per month. Bottom line, it's expensive. According to Brad Sea, "many times homeowners can eliminate PMI if they have at least 20% equity in their home. And with home values increasing steadily over the last few years homeowners may be closer to this level than they think." This alone may be reason enough to consider refinancing.


5. Use Equity For Home Improvement - You could refinance to take cash out of your home and use it to make home improvements. As Brad Sea told us, "Due to people staying at home more during the pandemic, there is an uptick in homeowners who do a 'cash-out refi' to use the money to add a home office or a new deck or a pool to their current home." With a cash-out refi, you could still capture a lower rate AND put your equity towards improving the overall value and enjoyment of your home.



Even when are clients aren't ready to buy or sell, we want to be a source of valuable information to help them make the most of their home. Want to know what you're new payment might be if you refinanced? Message us at 812Living@gmail.com


And for all of your real estate needs, connect with us at 812living@gmail.com or visit us at 812living.com to find out how we offer our clients M.O,R.E.


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