Share this Newsletter:      
South Shore Bank
781.682.3715 SOUTHSHOREBANK.COM July 2020
[back to newsletter]

 
 
  Subscribe to our Newsletter  
 
Tell A Friend
 
Facebook
Twitter
LinkedIn
Instagram

June 2020
May 2020
April 2020

[MORE]

Thinking About Refinancing Your Home Mortgage?

The idea behind refinancing a home mortgage is simple: You’re taking out a new loan to pay off and replace the current one. The goal is to lower your interest rate, reduce the loan term, switch a loan type, or to access the equity in your home.

One reason to refinance is to lower your interest rate, which would reduce your monthly mortgage payment, leaving you more money to cover other expenses or to boost your savings.

If you currently have a $200,000, 30-year loan at 6.5% interest, your monthly payment would be $1,264, but it would drop to $955 if you refinanced at a rate of 4%. That’s saves you more that $300 a month for other uses.

Another refinancing option would be to reduce the term of your loan – say from 30 years to 15. The advantage here is cutting the number of years it takes to pay off your home, saving you thousands in interest costs.

Over 30 years, the total cost to pay off your $200,000 mortgage at the 6.5% interest rate would cost you about $455,000. If you refinanced to 15 years at 4% your monthly payment would increase slightly to $1,479 but your total repayment cost would be only about $266,000 – which would save you about $189,000.

Another reason to refinance would be to switch from an adjustable rate mortgage to a fixed rate, which would protect you if the adjustable rate were to rise.

Refinancing to access the equity in your home is another option. If you were to refinance the full $200,000 but you only owe $160,000 on your home, you’d have $40,000 in equity that could be used for home improvements or to pay off debt. Just keep in mind that you still have a $200,000 loan that will need to be paid off.

Refinancing does come with some costs, which can run into the thousands of dollars. There will be a variety of fees and other expenses, such as points, that will need to be paid up front. If you have to pay 3 points on a $200,000 loan, for example, that would be $6,000.

If you’re considering refinancing, South Shore Bank will help every step of the way. The ultimate goal is to make sure refinancing makes good financial sense for you. To learn more visit www.southshorebank.com or contact our Customer Information Center (CIC) at 781-682-3715 or email CIC@SouthShoreBank.com.

Visit MoneyIQ for more articles and videos on financial topics created just for our clients. 

[PRINTER FRIENDLY VERSION]
Published by South Shore Bank
Includes copyrighted material of IMakeNews, Inc. and its suppliers.
Disclaimer - All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.

External links are provided for your convenience. The Bank does not endorse or guarantee the products, information, or recommendations provided by linked sites and the Bank is not liable for any products or services advertised on these sites. Each external site may have a privacy policy that differs from the Bank. Any linked site may provide less security than the Bank’s website and e-newsletter site.
NMLS# 407656 Member FDIC. Member DIF.



Powered by IMN