Reasons to Refinance Your Jumbo Mortgage Loan
Finances are always tricky for dads. Maybe you have to replace the Miata with a minivan. Maybe it’s time for braces. For both kids. Maybe it’s finally the year you take the family on that Disney cruise. Unfortunately, the best things in life really aren’t free. Fortunately, refinancing your jumbo mortgage loan can be a great way to save thousands of dollars a year—but you’ve got to have a reason. Here are three reasons it might be a good time to consider refinancing:
- 2005 – $359,650
- 2004 – $333,700
- 2003 – $322,700
- 2002 – $300,700
- 2001 – $275,000
- 2000 – $252,700
Interest Rates – These are constantly changing. If they have come down a lot since you purchased your home, refinancing can be a great idea. Keep an eye on the rates lenders are offering. You never know when you’ll be able to lock in a rate that can make a big difference in your monthly budget.
Conventional Loan Limits – Like interest rates, these change often, but almost always in one direction: up. Currently, any loan larger than $417,000 is considered a jumbo mortgage loan. But this figure was much lower in the years before 2006:
If you purchased a home with a jumbo mortgage loan prior to 2006, there is a good chance you can refinance today with a conventional loan, which are available at even lower rates. Take a look at your current statement. If your principal is less than $417,000, you may be able to qualify for a conventional loan. This could save you thousands of dollars over the life of your loan.
Adjustable vs. Fixed Mortgages – Depending on where interest rates are, you may want to consider switching your loan from adjustable to fixed during a refinance. While you will get a lower initial rate on an adjustable mortgage, this rate can rise significantly after a set period which can range from 5 to 10 years or more. If rates are high and you expect them to come down, an adjustable rate can be a good idea. But if rates are low, it might be a good time to lock one in with a fixed mortgage.
If refinancing your jumbo mortgage loan makes sense after talking to a lending professional or your financial advisor, it can be a great way to put more money in your pocket to cover those extra expenses, planned or unforeseen, that being a dad can bring to your life.