As they approach retirement, many Americans consider downsizing their home in order to reduce monthly expenses. While this is a great strategy for some, it's also not the only choice. Should you forgo moving and instead refinance your mortgage? Here are three reasons why this could be a better move in the long run.
1. Access the Cash in the Home
Many retirees have a large portion of their net worth locked up in a piece of real estate. Primary homes are valuable, but they're not liquid cash you can get hold of. Even if you sell and buy a smaller home, you only free up a portion of that value to use for retirement. With many Americans' retirement portfolios less robust than they would like, accessing the chunk of money in their home is necessary.
Refinancing allows you to pull out a significant percentage of the home's value to use as you need to. Pay off higher interest debt, for instance, shore up investments or add an annuity. Then, you pay it back over many, many years.
2. Achieve Comparable or Better Savings
If you're downsizing to lower your mortgage bill each month, you can accomplish the same result without moving. Refinancing provides many options to choose the term length, interest rates, and monthly payments which work best for your retirement budget. With as much equity as you likely have at this point, nearly all choices are usually available.
In fact, you may save even more by refinancing than you would by moving. How? Buying a different house often calls for updating things, making repairs, or remodeling what the prior owner did. Staying put avoids all these costs.
3. Keep the Home You Want
Are you excited to move or dreading it? Retirement is a huge life change for most, and so is moving houses. If you'd rather avoid the extra stress of changing your home at this delicate time, refinancing is the answer. You already know that your current home works for you. Hopefully, you love most or all of it. Therefore, you save yourself time and effort trying to create a happy nest once again.
Where to Start
Could refinancing be a better option than moving? Retirees deserve to have all the information they need to make the right decision. Get that information by meeting with a mortgage loan refinancing company in your state today. No matter what you end up doing, you'll be confident that you have made the best choice possible.
To read more about mortgage loans, contact a local professional.Share