"Cash-in" Refinance, A Smart Investment Move
Could your best investment right now be in your home?
Considering the crash in home values over the last couple of years, the suggestion seems absurd. However, with the best bank rates on savings and CDs paying under 1 percent and the stock market’s instability, your mortgage may be your best investment.
With mortgage rates consistently reporting record new lows each week, homeowners are trying to figure out how to lock in these long-term savings. Many are faced with homes that are currently worth less than their original mortgage, but plan on living in their current home for the foreseeable future.
This scenario could be good news for borrowers with savings, good credit, and a stable job. You can lock in an all-time low mortgage rate, pay down your mortgage, lower your payment, and get a healthy return on your investment.
Reversing the refinance boom trend of cash-out refinances from a few years ago, Freddie Mac is reporting that 22 percent of borrowers who refinanced early this year paid additional money at closing. This trend is one of the highest cash-in refinance rates in this decade.
This seems to reflect a broader trend of consumers reducing debt and turning away from excessive use of credit. Responsible homeowners seem to be seeing the current rate environment as an opportunity with several smart personal finance advantages.
Lower mortgage rates and adding cash into your current mortgage could bring these smart personal finance benefits:
- Bring mortgage into conforming loan limits (lowering the rate even further)
- Eliminate second mortgages or mortgage insurance
- Lower current mortgage payment
- Accelerate mortgage pay-off
- Shorten mortgage term and total interest paid
Is a “cash-in” refinance a smart move for your mortgage? Get up to 4 offers at LendingTree.com from licensed mortgage brokers who compete for the opportunity to lock in one of the lowest rates in history.
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