Are you thinking of refinancing your mortgage in preparation for retirement? This can be achieved in several ways and comes with the benefit of lower monthly repayments, a longer loan term and more, depending on your unique requirements. As one of the most valuable assets you own, refinancing your home can help to increase your cash flow or reduce your expenses in your golden years.
When it comes to refinancing a mortgage, there is no one-size-fits-all solution for retirees. It all depends on your individual needs: are you looking to free up cash flow in anticipation of healthcare needs? Or do you want to pay off your mortgage as soon as possible so you can wipe that expense off your monthly bills? This will determine the kind of refinancing you want to go for. Retirees looking to pay off their mortgage sooner will benefit from a shorter term with higher monthly repayments, whereas those looking to free up cash flow will benefit from the opposite.
As we retire, our financial needs can change. The fact that you are no longer working can mean that no money is coming in, and all you have to live on is your nest egg. However, if that amount proves to be insufficient or a sudden emergency expense props up, you could be ill-prepared. To this end, retirees who have yet to pay off their mortgages often consider refinancing. For instance, by opting for a cash-out refinance, equity that is tied to your property is liquidated for immediate use. Time-sensitive expenses can be met in this way.
Refinancing your mortgage can be a better way of freeing up funds than obtaining other loans. This is thanks to lower interest rates. In addition, you may be anticipating moving to a smaller home in the near future, when your children have moved out. If that is the case, opting for lower monthly payments to save for this eventuality can go a long way. However, refinancing should only be done if it makes sense, both financially and practically. If you intend to leave your property as an inheritance to your loved ones, for instance, having too long a loan term can result in an unpaid mortgage when you die.
Stockton Mortgage is an approved Ginnie Mae issuer and a Fannie Mae/Freddie Mac seller/servicer licensed in 17 states, including Georgia, Indiana, Kentucky, Michigan, Ohio, and Tennessee. As a full-service, independent mortgage bank, we serve a wide variety of homeowners with differing needs and concerns. Our team comprises professional underwriters with access to a Borrower Intelligence System, and all our loans are 100% funded and closed in-house. When you engage our services, you can expect the highest level of efficiency and customer service throughout the process.