Refinance into a Low Interest Rate and Retire as Planned!
46% of American home owners that refinanced their home in 2010 brought cash to the closing table. This means despite current housing and economic conditions, consumers are interested in re-building equity and still consider their home a worthwhile investment.
Refinancing into a lower interest rate has provided a way for many consumers to recover from more recent financial loss from investments like: 401k, the stock market and other financial investments. Through reducing monthly payment, home owners have the option to re-invest the savings by paying down principal. This method saves tens of thousands of dollars while knocking significant time off the term of the loan- allowing an opportunity to recover financially from economic conditions and retire as planned or sooner than expected.
As a home owner, it’s important to view your mortgage with a financial perspective of return on investment over time. Here’s a look at what you can save long-term by refinancing into a lower interest rate:
For Example:
| Your Current Financing | After Refinance | ||
| Loan Amount: | $200,000 | $200,000 | |
| Interest Rate: | 6% | 4.50% | |
| Term of Loan: | 30 Years | 21 Years | |
| Payment: | $1,200 | $1,000 | |
| Additional Principal: | $0 | $200 | |
| Total Payment: | $1,200 | $1,200 | |
| Total Payout over Life of Loan: | $431,677 | $312,058 | |
| Difference in Savings: | $119,619 | ||
| Difference in Term: | 9 Years | ||
What Does This Mean?
In this example, if you do nothing, your payment will stay the same and you will pay on your home loan for 30 years. When you refinance into a lower interest rate and re-invest that savings, your payment stays the same but you save $119,619 and you shorten your term by 9 years!
Refinancing allows you to expand your investment options. You can choose to either re-invest in your home by making an additional payment towards principal and increase your home’s equity, use the savings to invest elsewhere, or pocket it for a rainy day- all providing an avenue towards saving for retirement!
If you are planning for retirement and looking for ways to re-invest in your future, possibly lower your monthly payment, or just make the most of your hard earned dollar, look what refinancing into a lower interest rate can do for you. The numbers don’t lie! Call 866-584-0954 to talk to an experienced Shore Mortgage Loan Officer today!
