Interest Rates are Falling!

Understanding interest rates 

Your interest rate is the percentage of a loan that the lender charges annually in exchange for borrowing the money. The lower the interest rate, the less you pay over time. Lower rates are a great opportunity to save money on your home loan. 

Refinance to lower your rate 

Refinancing involves replacing your existing mortgage with a new one, ideally at a lower interest rate. This can lower your monthly mortgage payment, saving you money every month.

• Lower monthly payments: When interest rates drop, you may be able to get a better deal on your mortgage. Even a small drop in rates can mean big savings—lowering your rate by just one percent could save you hundreds of dollars every month!  For example, a one percent rate difference on a $250,000 loan can decrease your principal and interest payment by more than $150 a month. 

• Reduced loan term: Refinancing can also help you reduce the length of your loan repayment schedule. By switching to a shorter loan term, for example from a 30-year to a 15-year mortgage, you can pay off your loan faster and save thousands of dollars in interest over the life of the loan.  

Refinance to get cash 

If your home’s value has increased since you purchased it, you might be able to access the equity through a cash-out refinance. A cash-out refinance allows you to take out a new mortgage for more than what you owe and get cash in hand for the difference between your current mortgage balance and the new loan amount. 

What is home equity? 

Home equity is a homeowner's interest in their property, representing the portion of the home's value that they own outright. It's calculated by subtracting the outstanding mortgage balance from the home's current market value.  

For example:  

Why should you consider your options now? 

• Get cash from your home’s equity: If your home’s value has increased since you purchased it, you may be able to tap into that equity through a cash-out refinance. You can use that money to pay off debt, home improvements or other big expenses. 

• Consolidate your debt: Do you have high-interest credit card debt or personal loans? Refinancing your mortgage could allow you to roll that debt into your home loan, which typically has a much lower interest rate. This makes managing your payments easier and could save you money over time. 

Take the next step with Carrington 

Don’t wait—reach out to Carrington today and start your refinancing journey! Our team of experts is ready to help you take advantage of these lower rates and find the best solution for your financial situation. 

Have your eye on a new dream home instead? The Carrington family of companies, including real estate brokerage Vylla Home, is a seamless, one-stop shop for all your homeownership needs. Are you ready to take the next step? We’re here to help, contact us today!