As mortgage rates have dropped to amazing lows over recent months, many homeowners have been refinancing their mortgages to lower their monthly payments. However, without a plan on how to utilize this extra cash, it’s all too easy to simply spend away the difference. If you’ve refinanced recently or are planning to do so soon, here are some ideas for putting your savings to good use.
Pay down debt
If you have any outstanding debts, the savings from your refinance may be able to help you reduce those balances. By paying down what you owe – especially high-interest debt such as credit cards – you may be able to save big on interest payments and gain the peace of mind of a lighter debt burden.
Add to your emergency fund
Expecting the unexpected means that you should be prepared for any emergencies. You can use your extra cash from your refinance to start or add to your emergency fund. Whether it be a medical expense, car repair or job loss, an unforeseen expense is less of a burden if you have some extra money set aside.
Make home improvements
You can put the money you’ve saved back into your home by making home improvements or renovations. A remodeled kitchen or bathroom or even a smaller DIY project can improve your home’s appearance, function and value.
Build up your retirement fund
An important priority for many Americans is making sure that they have enough money saved up for retirement. Any extra cash each month can help a lot in the long run, so you may want to consider putting the savings from your refinance into your retirement fund. “Future you” will thank you!
Save for a goal
No matter who you are, you probably have at least one goal or dream – big or small – that needs some extra funds to make it happen. This could be a purchase, a vacation, education expenses or something else. By setting aside some or all of your refinance savings toward a goal, you can reach it sooner.
If you’ve had your current mortgage for awhile, you may be able to lower your monthly payment by refinancing to a lower rate. For a free consultation to learn about your options, get in touch today!