Why Refinancing Is A Better Option Than Forbearance?
Written By: Aldryn Tangui
Due to Covid-19 many borrowers are contemplating whether refinancing or forbearance on their current home is a better option. In this article I will explain why refinancing your current mortgage is a better option. Mortgage rates are at a record low nearly 13 million borrowers can now save money by refinancing their home loans and lowering their current rates by at least 75 basis points, according to Black Knight, a mortgage data and analytics company. This is huge because there are so many borrowers who can at this moment lower down their interest rate and save money with a lower payment. Also, another huge advantage of refinancing versus forbearance is cashing out the equity your home. The equity can be used to repair or update the house, or it can be used to pay other high interest debt like credit cards. In addition, equity can be used for the down payment on another home while taking advantage of low interest rates. In the other hand, forbearance should be a last resort. Forbearance may have a toxic element - It is not 100% clear, but we are hearing that if you enter forbearance, you will not be able to take out another mortgage for 12 months and have to bring the forbearance amount current. This may cause homeowners to miss a great opportunity in housing to buy or refinance with rates expected to stay low. All in all, it is super important before deciding whether refinancing or forbearance is the option for you please weigh out the pros and cons for each. Any questions to see if you can save money with a refinance please contact me at 774-219-3805