ST. PETERSBURG, Fla. — If you already own a home, now might be the time to refinance.
With rates under 4 percent, some are seeing this at the time to do a renovation or to just modify their payments. A 30-year fixed loan has a rate of 3.24 percent while a 15-year fixed is 2.51 percent.
A recent Zillow survey found nearly a third of homeowners passed up on refinancing in 2020 because they don't understand the process. Let's talk you through it.
According to Bankrate, some of the pros are that you can lock in a lower rate, sometimes skip the private mortgage insurance, and get an opportunity to use your home’s equity to get money for a renovation.
Now to some of the cons. Nothing is ever free. It's going to cost 2 to 5 percent of you mortgage to refinance for that lower rate. If you go from a 30-year loan to another 30-year, you're extending the time to repay versus switching to a shorter-term loan that can help you become mortgage-free sooner.
Bankrate has a checklist of things you need to do figure out if refinancing is for you.
