The Advantages and Disadvantages of Refinancing Your Mortgage

Homeowners refinance for a variety of reasons, some of which include opting for lower interest rates as they become available, taking advantage of built-up equity in their home by borrowing additional amounts, and moving from an adjustable mortgage to a fixed rate mortgage. There’s a variety of refinancing options, but it can be hard to know all the pros and cons of refinancing before you commit. Take a look at some advantages and disadvantages of refinancing.

Disadvantages

When weighing the disadvantages of refinancing your mortgage, consider what you will ultimately gain in savings from refinancing. How much will you be spending in fees, closing costs, penalties, and paying points? Will it be worth it to move forward and refinance? Will you be paying more in higher interest rates if you move from a fixed-rate mortgage to an adjustable rate mortgage?

Another thing to consider is that depending on the term and length of a new loan, it may take much longer to pay off your home than it may under your current plan. Equity may make a difference in how you consider refinancing. Taking equity out of the house may mean you owe significantly more money. Taking cash out may decrease equity in your home, which can trigger a few additional maneuvers on your part—one of which could require you to carry private mortgage insurance (PMI).

Advantages

While there can be many disadvantages that may make you hesitate when it comes to refinancing, there can be many advantages that can make refinancing the best option for your financial future.

Refinancing can help you better define the terms of your payments. It can shorten repayment time, reduce your interest rate, and lower monthly payments. Taking advantage of low rates could improve your loan period and grant you more leverage in negotiating. Greater flexibility means improving your chances of obtaining a favorable deal.

Consolidation of loans can also streamline your repayment plan, and make your repayment plan more manageable. Another advantage of refinancing your mortgage is that you could potentially avoid the risk of rising interest rates if you move from an adjustable to a fixed-rate mortgage.

Before you decide on or against refinancing your mortgage, do your research to find the best fit for your finances. Speak to a professional financial expert to help you weigh the pros and cons of refinancing your mortgage. Contact one of our specialists at Financial One Credit Union in order to make great strides in your financial security today.

The Benefits of an HSA Checking Account

One of our signature checking options is our Health Savings Account; a smart option for anyone wanting to strategically save for health-related costs. Many families experience high healthcare costs from time to time, and these costs can arrive at unexpected times. So how do you financially prepare for these? Let’s look at 5 benefits of an HSA Checking Account.

1. Peace of Mind

An HSA account is a very convenient option for paying for qualified healthcare expenses. You won’t need to pull money out of your day-to-day finances to pay for healthcare needs, allowing you to focus on caring for yourself or your loved ones. Depending on your specific situation, HSA funds could be used for things like doctor’s visits, copays, dentist visits and dental procedures, and even vision-related expenses in some cases. We will help you with the details of your situation.

2. Convenient

Access your funds easily with your free HSA debit card or easy direct check writing (which includes a free box of 50 checks). You’ll also have access to free mobile banking, free eStatements, and free online banking and bill pay.

3. Tax Advantages

HSA contributions are deductible from your gross pay (pre-tax), and funds in an HSA account are able to augment tax-free. Plus, with our HSA Checking, any funds not used by the end of the year are still yours to keep. We don’t operate a “use it or lose it” policy. According to funcheaporfree.com:

“Young people in good health may benefit the most from an HSA, because they tend to have lower medical bills, and over many years the accumulated savings can be significant. Also, if you lose your job or are laid off and are collecting unemployment insurance, you can use your HSA funds to pay for routine health expenses and health insurance premiums, tax-free.”

4. Easy to Get Started

These accounts have no setup fee and no monthly maintenance fees. They run independently from your insurance, so it is easy to work with our staff to create your account.

5. Stays in Your Name

Your account remains in your name, no matter if you change jobs, move, or have other life changes. Since it is not linked to your employer, but to you personally, it will be more easily accessible throughout your life.


To get started with your convenient HSA Checking Account, apply now and we will be in touch with you shortly.