Have you been on the sidelines watching as friends and family refinance into ultra-low interest rates or turn their equity into affordable financing? If you’ve been wondering what to do when mortgage interest rates are low, this article is for you! We’ll walk you through three different ways to take advantage of the recent rock-bottom rates before they start to rise again. With tips for each scenario, you’ll learn how you could potentially benefit from refinancing, opening a HELOC, or buying a second home.
Refinance Your Mortgage
If you bought your home when interest rates were higher than they are now, you may be able to save money over the life of your loan, and lower your monthly mortgage payment, by refinancing your home loan with a lower rate.
A mortgage refinance does come with costs to consider, such as an appraisal fee and other closing costs, but it may still be worthwhile if you plan to stay in your home for the long term. A cash-out refinance is another option if you’re looking to leverage the equity in your home for affordable financing of a renovation project or other large expense
Want to know if a refinance makes sense for you? Learn more about mortgage refinance and what the process entails in our “Guide To Refinancing Your Home In Central IL. Our mortgage lenders are here to help you explore your refinance and other home loan options so you can decide whether or not refinancing is a good fit for your current financial situation and goals.
Open a Home Equity Loan or Line of Credit (HELOC)
Recent historically low interest rates, along with other factors, have increased home values across the country and here in Central Illinois. It’s worth checking your home’s current market value—it may be worth more now than you would expect. If your home value has increased significantly, you may have enough equity (the difference between your mortgage balance and your house’s current value) to open a HELOC or take out a Home Equity Loan.
A HELOC is a revolving line of credit secured by your home equity, which is why interest rates on HELOCs are much lower than with unsecured lines of credit, such as credit cards. You can use your HELOC to pay for expenses as needed or leave it untouched as a safety net in case an emergency or unexpected large expense arises. If you have multiple credit card balances, a HELOC can be used to consolidate that higher interest debt.
Like a HELOC, a Home Equity Loan is secured by the equity in your house. However, a Home Equity Loan is a term loan with financing provided in one lump sum. A Home Equity Loan is a good option if you already have a specific need or project in mind, such as debt consolidation, a child’s college tuition, or a large home renovation.
Contact one of our mortgage lenders to learn about your home equity and how a HELOC can benefit you in 2021 and beyond.
Buy more property
If you’ve been thinking about purchasing a vacation home or investment property, now is the time to lock in historically low rates on a second home mortgage.
From the perfect lake house to an income-earning rental property, why not explore the idea of buying a second home in Quincy, IL, on Lake Michigan, or wherever else your heart desires. Vacation homes can also generate income if you rent them out for some or most of the tourist season.
So, if your budget allows, you can finance a second home to use in a variety of beneficial ways.
Talk with one of our mortgage lenders about your options for second home financing.
Let us help you make the most of low interest rates!
Have you been wondering how to capitalize on historically low rates? Connect with a member of the First Bankers Trust lending team to learn more about your home equity and financing options so you can find the best way to take advantage of low interest rates.
Are you ready to apply for a home equity line of credit or still have questions? Visit one of our West Central Illinois bank locations to learn more or apply online today. Our experienced and locally-based mortgage lenders can help you find the right home loan to meet your needs. Contact a lender today!
Serving our communities since 1946, First Bankers Trust Company has lived by the motto that customers are always FIRST. We strive to be the best mortgage lenders in West Central Illinois by meeting and exceeding our customers’ needs. If you’re looking for mortgage refinancing help in West Central Illinois, contact a lender today!