| How long to expect to stay in your current home? |
Length of time you expect to
be in the property.
be in the property.
Refinancing for a Lower Rate
Things to Consider
This is important because
loans fixed for longer terms are
generally more expensive and
carry higher rates. So, why pay
extra to fix your rate for 30 years
if you only plan to live in your
home for 5? In the US, first-time
home buyers keep their houses
an average of about 3 years,
second time home owners an
average of 5 years.
If you plan to keep your home
but convert it to rental property,
refinance for the long term first.
Financing rentals is more
difficult and more expensive.
loans fixed for longer terms are
generally more expensive and
carry higher rates. So, why pay
extra to fix your rate for 30 years
if you only plan to live in your
home for 5? In the US, first-time
home buyers keep their houses
an average of about 3 years,
second time home owners an
average of 5 years.
If you plan to keep your home
but convert it to rental property,
refinance for the long term first.
Financing rentals is more
difficult and more expensive.
How long to you expect to
remain in your current home?
remain in your current home?
1 to 3 Years
Focusing on the short term gives you plenty of low rate
options and offers you the lowest rates available. Fix your
rate for the entire three years, or look at lower rates that
adjust with the financial markets.
Focusing on the short term gives you plenty of low rate
options and offers you the lowest rates available. Fix your
rate for the entire three years, or look at lower rates that
adjust with the financial markets.
3 to 5 Years
This is the average length of time most homeowners
keep their properties. Unless you have just purchased the
home of a lifetime of fantasies, three to five years is a
good window to be looking at financing.
This is the average length of time most homeowners
keep their properties. Unless you have just purchased the
home of a lifetime of fantasies, three to five years is a
good window to be looking at financing.
6 to 10 Years
This time line requires a hard look. Many thirty year
mortgages are based on a ten year bond rate, so there
may be no benefit to selecting a ten-year hybrid ARM over
a 30 year fixed rate loan. Other ARMs may offer savings.
This time line requires a hard look. Many thirty year
mortgages are based on a ten year bond rate, so there
may be no benefit to selecting a ten-year hybrid ARM over
a 30 year fixed rate loan. Other ARMs may offer savings.
More Than 10 Years
You're in it for the long haul. At this point you may be able
get a better rate and pay less interest over the life of the
loan by taking a 15 or 20 year loan instead of the usual 30.
You're in it for the long haul. At this point you may be able
get a better rate and pay less interest over the life of the
loan by taking a 15 or 20 year loan instead of the usual 30.
