Refinancing a home means taking out a new loan to pay off your original mortgage loan, and it’s something that homeowners sometimes take into consideration. Homeowners will often refinance to take advantage of lower market interest rates, cash out a portion of their equity, or to reduce their monthly payment (mortgage payment) with a longer repayment term. One thing to be aware of is that this might change your credit score. Even in the face of a possible change to your credit score, it’s still worth it to refinance your home mortgage if you’re planning to stay in your home for a long while.
Once you receive a new loan, that’s when the lower interest rates you want to take advantage of becomes available. You no longer have to deal with the higher interest rate or dealing with the number of times interest charges are earned. Home refinancing has grown in recent years. Refinance lending has nearly doubled over the past three quarters, cash-out refinances were up 24% since the last quarter of 2018, and these made up 52% of all refinances. Once you actually refinance your home and figure out your financial goals, you will save money. Below are a few ways to invest those savings, from doing something as simple as setting up a savings accounts, to investing in common stock.
Savings Accounts
Savings accounts are great places to put any money you might save from refinancing your home. Banks and credit unions offer a wide variety of savings accounts, where homeowners can place your money to sit and grow. The Federal Deposit Insurance Corporation (FDIC) can insure your money up to certain limits. Another thing to be aware of is that your savings account might be charged if a minimum amount is not kept in the account, and if you go over the monthly allotted amount of withdrawals from the account.
Stock Investments
Once you complete your refinance home loan and find that you’ve saved a bit of money, you might want to look into investing that money in the stock market. Investing your money into common stock will accumulate with a slow burn when you go this route. If you’re interested stock market investments but not sure how to make sure you get the best returns on your initial investment, you should know that there are businesses like Wealth Rocket which can help you with finding the best way to make your savings, that’s invested into common stock, to grow over time.
Certificates Of Deposit (CDs)
As in the case of a savings account, you can purchase a CD from a bank or credit union. CD’s are a time deposit, a financial product commonly sold by banks, and credit unions. These forms of deposits differ from savings accounts in that the CD has a specific, fixed term and usually, a fixed interest rate.
Popular CD maturity periods are 6-month, 1-year, and 5-year. Any earned interest can be added to the CD if and when the CD matures and is renewed. As in the case of savings accounts, it’s always best to look around for the best CD rates.
Charities
So you’ve saved a bit of money by refinancing your money. Why not give it all or at least part of it to a good charity? In a way, you are investing in the success of these non-profit organizations. What better way to invest your hard-earned money than to give back to those who need it? There is no shortage of causes to invest or give back to today’s world. Think of it as putting a down payment on humanity, while you’re trying to get people out of long-term debt that life keeps throwing at them.
The unfortunate fact is that people will always need help. So why not try to give them a better deal when it comes to life? Sure you’re not going to have enough money to say, buy someone a new home, or give someone a huge amount of money. But just trying to help someone in such a way for the first time can go a long way.
Our world has not yet gotten to the point where everyone’s basic needs can be taken care of, which is why it’s sometimes up to others to step in and help out from time to time. With the extra money you’ve received from refinancing your home, why not invest some of that into helping those less fortunate?
