Saving for College? Refinance Your Home Mortgage To Take Advantage of Today’s Low Interest Rates Roger Odoardi If you’ve reached that point in your life where you’re beginning to worry about how you’re going to afford your child’s college tuition, it may be in your best interest to begin examining the benefits of home mortgage refinance. Home mortgage refinance has proven to be a popular strategy homeowners use these days to pull cash and put it aside as future college money. This is achievable when a homeowner recognizes that they can refinance their home mortgage loan at a lower interest rate than they originally agreed upon, and for a longer period of time. Think about it: if you’re able to refinance your home mortgage with a fixed rate in the low 4s (or 3s if at 15 years) then you can pull some of the equity in your home and put it aside for those future college tuition bills. It makes much more sense to take advantage of a low interest rate now, rather than waiting three years from now when home mortgage rates could be up around 6% and student loans could be even higher. But before you go pulling cash like it’s nothing, consider these factoids about home mortgage refinance and whether they make sense for you: You may be charged certain fees when refinancing When refinancing a home mortgage loan, a homeowner may encounter certain costs and fees tied to the terms of their new loan. The list of “other costs” includes but is not limited to: Mortgage application fee Loan processing fee Lenders fee Be prepared to go through the home mortgage loan process all over again The process of refinancing your home mortgage will be very similar to the one you followed when originally applying for a loan. Only when filling out the mortgage application and speaking with your lender/broker, be sure to make it clear that your goal is to convert some of your home’s equity into cash. You will also once again be required to submit documentation to support your home mortgage refinance application. This includes: W-2s Pay stubs Income tax forms Get ready for another appraisal Because your lender will need to justify loaning you more money, they will need to determine they aren’t lending you more money than the home is worth. An appraisal is different from a home inspection however. Rather than inspect elements of your home, an appraiser will instead work to determine the general condition of your home in order to determine the comparable market value. The lender will likely end up selecting and scheduling the appraisal on your behalf. It’s a good idea to prepare your home for this appraisal because its outcome can have a major impact on the refinancing. Parents of high school age kids all experience the same conundrum — how will I pay for my kid’s college experience? Luckily, if you’re a homeowner with a mortgage you have a few options when it comes to coming up with the cash needed to send your child toward higher education. You can realize savings through a reduction in interest, or you can pull cash from the equity of your home. At Blue Water Mortgage, our team of professional brokers can assist you in refinancing your home mortgage as a means of paying for your child’s college education. Our Refinance Interest Savings Calculator can help you calculate your interest savings based on refinancing your existing mortgage. Contact us today to get the ball rolling on refinancing your home mortgage. Roger Odoardi Roger is an owner and licensed Loan Officer at Blue Water Mortgage. He graduated from the University of New Hampshire’s Whittemore School of Business and has been a leader in the mortgage industry for over 20 years. Roger has personally originated over 2500 residential loans and is considered to be in the top 1% of NH Loan Officers by leading national lender United Wholesale Mortgage.