It is easy to understand why many homeowners are tempted by refinancing to save money and create a new financial plan. However, a home sale can often be an even better way to achieve these important goals.
When a client is considering options for their property, here are the top five reasons to choose a sale over a refinance:
Higher Financial Gain
Selling a home is usually the most profitable option for a person because they will get to keep any profit made after all related costs are factored in. Closing costs, administrative costs, and other selling costs can significantly reduce the end sale price, but the gain experienced after these deductions typically remains higher than the potential profit acquired from a refinance. Financial advisors often recommend selling a home to maximize the profit potential because the gains even after smaller costs can still be much higher than from a refinance.
Greater Equity Growth
While homeowners may feel they are locked into a mortgage by deciding to refinance, a sale can provide greater equity growth over time. Many homeowners view this as an opportunity to invest in a larger and more stable asset. Market forces, such as population growth, technological advancement, or changing trends can all influence an increase in the value of the home. Furthermore, depending on the ownership structure of the home, the homeowners may be eligible to receive tax deductions for any accumulated mortgage interest, real estate taxes, and other costs associated with the sale. Over time, these combined factors can contribute to greater equity growth and even greater financial returns. Ultimately, a well-considered sale can be a wise and profitable investment.
Credit Scores
The sale of a house can significantly decrease a homeowner’s DTI ratio, and potentially increase their credit score, giving them better rates on their new loan. Refinancing a loan on the other hand, may not be as favorable to one’s credit score as it requires applying for additional loans and/or credit cards. This additional debt taken on can lead to a decrease in the homeowner’s credit score due to the increase in their DTI ratio. A sale of a house eliminates these potential issues by cutting out borrowing multiple loans and/or taking on new credit cards. As a result, it is a much more favorable option to the homeowner in terms of preserving their credit score.
Easier Home Maintenance
When home maintenance is necessary, refinancing a home can be a time-consuming and expensive process. Making repairs and updates to the home can add costly expenses to the already high cost of refinancing. Instead of refinancing, a homeowner can opt to sell the home instead. The buyer is likely to be in a better financial position to make the necessary repairs and updates. By completing the sale, the homeowner avoids the costs associated with making repairs and the buyer reaps the benefits of the new improvements. Selling a home with the necessary repairs already completed can also increase the value of the home and attract a higher selling price. Therefore, selling a home instead of refinancing may be a better option for easier home maintenance.
Faster Cash Injections
The faster cash injection from a sale can be incredibly beneficial to a homeowner, especially if they need a quick influx of cash for an unexpected expense. Selling your home can also enable you to pay off any existing debt or bills much more quickly, allowing you to save on interest and finance charges. Furthermore, quicker cash injections can help you purchase a new home much faster than the traditional refinancing process. Additionally, if you are wanting to make a large purchase, such as a car, selling your home can provide you with the payment you need to make the purchase. Regardless of the reason, a fast cash injection from the sale of a home can be advantageous for any homeowner.
These are just five reasons why selling a home may be a better choice than refinancing. Ultimately, the decision depends on the individual homeowner’s goals and situation, but understanding the advantages and disadvantages of each option can help them make an informed and financially wise decision.
The bottom line is, it may be better for you to sell directly to Down South Florida Home Buyers right now than refinance your home in West Miami. Whether your reasons are financial or because your property just isn’t the right home for you any longer, by selling now, you will end up ahead of the game. By working with Down South Florida Home Buyers, there is no lingering around, waiting for the right buyer with the right offer. Let a professional from Down South Florida Home Buyers take the weight off of your shoulders, ensuring your needs are met in the transaction. At Down South Florida Home Buyers, we take the time to listen and are willing to meet your needs. The experts at Down South Florida Home Buyers are always more than happy to explain every step of the process. We’ve helped many other people through this process. At Down South Florida Home Buyers we have a team of reliable professionals who can handle everything for you and are readily available to support you from the start through to the final day of closing. Why not let Down South Florida Home Buyers answer any questions or concerns you may have and help solve your problems? Just send us a message or call Down South Florida Home Buyers at (239) 766-6225 today!