1% Rate Dip Got You Tempted? Here's How to Know if a Refi Makes Sense for You!

So, you see mortgage rates dipping and wonder if refinancing is the magic answer. Could a 1% drop translate to sweet, sweet savings?

Could a seemingly small change really make a difference?

Well, hold onto your house keys because the answer is…possibly!

Firstly, let's dispel a myth: a 1% drop in refinancing rates doesn't guarantee a 1% drop in your existing interest rate. A 1% drop means the current is lower.

If your current loan has a fixed rate, it remains the same unless you refinance it into a new loan with a new rate.

But that doesn't mean your current rate leaves no room for improvement!

Here's where things get interesting:

Cash-out refinance: Are you drowning in high-interest debt? If so, a cash-out refinance could be your lifeline. By leveraging your home's equity, you can consolidate debt at a (hopefully) lower rate, saving you money each month. Think of it as trading in multiple high-interest debts for one lower-interest mortgage payment.

Unlocking home equity: Need funds for renovations, education, or that dream vacation? Refinancing can tap into your home's equity, providing the cash you need. Remember, this strategy comes with its own set of considerations, so discuss the pros and cons with your mortgage pro.

Lowering your rate (if you bought recently): Bought your home in 2023 at a higher rate? Now's the time to rejoice! A 1% drop could translate to significant savings over the life of your loan. But remember, the math matters.

Factoring in the costs: Refinancing isn't free. Closing costs can eat into your savings, so do the math! Calculate your potential monthly savings, subtract the closing costs, and divide that by your monthly savings to see how long it takes to break even.

Time is your friend: Planning to stay in your home for several years? Even a small rate drop can add up to big savings over time. But if you're moving soon, the closing costs might outweigh the benefits.

Remember, this is just a starting point. The best way to know if a 1% drop is your golden ticket is to talk to us, your local mortgage professional. We can assess your individual situation, crunch the numbers, and guide you toward the best option for your financial goals.

Don't wait! Unlock your home's potential and start exploring your refinancing options today.