Refinancing can help meet your 2015 Financial Goals

moneyclockmortgageporterToday’s lower mortgage rates can help home owners with their New Year resolutions. The obvious first benefit of refinancing is often the reduced mortgage payment (or reduced mortgage term). There are simple steps you can take after closing your refi that can make a significant financial impact on your life.

Here are some other actions you can take to maximize the benefits of your refinance without doing a “cash out” refi. You can start with using the funds that would have gone towards the mortgage payment that you will “skip” after closing the new refi and using the check you will receive from your current mortgage servicer when they refund the balance of your existing escrow reserve account (for your property taxes and home owners insurance). Ready?

Fund your 2014 IRAYou have until April 15, 2015 to fully fund your 2014 IRA.  You still have time!

Establish an emergency fund. Make sure you have at least 3 – 6 months of savings set aside just in case something unexpected happens.

Pay down debts. Use your extra savings to apply towards debts that do not have any tax benefits. Focus on higher interest rates and/or debts that are beyond or close to their credit limits. By getting debts below 50% (and then 30%) of the credit limit, you will also help improve your credit scores!

Start a college fund. My son will be graduating from college this year! Wooo whoooo!!! I’m so glad that I started saving for him when he was a baby to help him with tuition and expenses. There are a lot of programs available, such as Washington’s GET program or a 529.

Save for a vacation. If you’ve been dreaming of a family vacation, socking away the savings from your refinance can help you reach that goal and having your toes in warm tropical sand without having to tap your credit cards.

Buy a vacation or an investment property. Reduced monthly mortgage payments on your primary residence may help you qualify for the vacation or rental home you’ve been considering.

Refinancing now may also be a savvy move for home owners who have retirement in their sights. When you refinance, you are qualifying based on your current income. Lenders are anticipating that the income will continue. It’s a lot easier to refinance, and lower your monthly payment, when you are employed vs. when you are retired and perhaps on a reduced income.

NOTE: Remember, I’m a mortgage originator and not a tax professional. Please consult with your CPA and/or financial planners regarding  your financial scenario.

If I can help you with refinancing your Washington state home, please contact me!

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