Extension Educator, Family and Consumer Economics
Extension Educator, Consumer and Family Economics
Extension Educator, Consumer Economics
358 Total Posts
Monday, October 26, 2009
Who couldn't use a little more cash each month! Refinancing your home mortgage might be the solution.
Given today's economy, interest rates on home loans are relatively low. It may make sense for you to refinance your existing home loan. Or, it might not! Like most financial decisions, you need to think about the costs and benefits.
Why do people take the time to refinance home loans? You might be asking yourself, "The loan I have now is working fine ... why should I change it?"
Refinancing a home loan can help people who have different goals. Refinancing can allow people to:
To decide if refinancing a loan makes financial sense for you, you need to start by asking yourself these questions:
For example, let's assume refinancing a home loan costs $3,000. In this example, the homeowner will have a mortgage payment of $50 less per month after refinancing. Then we know ($3,000 divided by $50) that it will take 60 months (or 5 years) for the savings to pay for the refinancing costs.
You can use a mortgage calculator, like the one at Bankrate.com, to help you calculate whether or not refinancing your home makes sense to you.
For more information about refinancing a home loan, visit the U of I Extension website, Opening Doors to Housing Success.
And, if you do decide that it makes sense to refinance your home mortgage loan, what should you do with that extra cash? Why, invest it for your retirement! What else would I recommend?! For ideas about how to effectively save for retirement, visit the Plan Well, Retire Well website.
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