Is a Michigan refinance right for you and your family? It might seem like a no-brainer, but there’s actually a chance it might not be in your best interests over the long term. A professional with Gem Home Loans can walk you through the process, explaining all of your options. That way, you’ll know you’re making the right decision. We won’t try to steer you in a certain direction just because we want to make some money. We don’t play those kinds of games, because we want all of our clients to not only be comfortable working with us, but also to trust us as well.

The Pros and Cons of Refinancing

Michigan RefinanceRefinancing is a very popular method of bolstering finances, giving you lower monthly payments or saving you a substantial amount of money. But if your credit isn’t where you’d like it to be, or if you haven’t done it before, it might get fairly complex.

A refinance, in a nutshell, means you’re taking a new loan out on your house. In most cases, you’re taking out that loan on the remainder of the money you owe. There’s a chance it will come with more favorable terms with your old loan. However, there are a lot of factors that go into determining whether or not that will be the case. These include the amount of equity you already have (meaning the amount of the original loan you’ve paid), your credit score, and others.

Here’s a quick look at some of the benefits of refinancing, as well as some potential drawbacks.

The Pros

You could see some significant benefits from refinancing your home. Here are just a few.

  • You could get a lower interest rate on your new loan.
  • You might see a reduced mortgage payment each month.
  • You might be able to pay off the new loan in a shorter amount of time.
  • You could use the cash you get to improve the home, or use it in other ways.

Maybe the biggest advantage is giving you a little more breathing room each month in terms of your budget. If you’re expecting an addition to the family, or you’ve seen your work hours decrease, this could be a major help. You might be able to take money out of the loan and put it toward your child’s college.

The Cons

As great as the benefits of a refinance may sound, it’s not for everyone. In most cases, you’ll have to pay closing costs – just like you had with your original mortgage. You will need to consider setting aside about $5,000 just to be on the safe side. This will include costs such as title services, survey fees, appraisal fees, attorney costs and more. You might find a lender that will provide refinancing with no closing costs up front. However, that will typically mean those costs are rolled into the new loan.

Also, many people refinance so they can pay off other debts. If this is the case, then you’ll have to have a clear plan on how to avoid accumulating higher debts in the future. Not only will you need a plan, you’ll also need the discipline to stick to it. That can be harder for a lot of people than you think – especially when they have a lot of new, disposable income.

Talk to Gem Home Loans

Get in touch with Gem Home Loans to learn more about your Michigan refinance options. You can contact us online or call 248-780-0601.