Better to Sell or Refinance in Portland?

If you’re having trouble making the monthly mortgage payment on your Portland home, or you would like to cash out some of the equity you’ve built, or if you’re still stuck with an old high interest rate, you may be in a position of wondering whether it’s better to sell your home or refinance it.

I’m not a financial advisor, but I’m happy to share my knowledge as a real estate agent to help you make an informed decision, or at least point you in the right direction!

Refinance loans come in many different stripes and colors. Depending on the loan you pick it could take you as little as one year to recover the costs of performing the refinance. It also could take as long as 3-5 years to recover the cost. Try the refinance break-even calculator, provided by MortgageLoan.com. If you are considering selling within one to two years, typically it doesn’t make sense to refinance first as it does take a while to recover those refinancing costs.

You can refinance and keep all the equity in your home and simply get a better mortgage rate. This would make sense if you want to stay in the home for a while. With mortgage still at a post-recession low, it’s still possible to get a low rate on a 10-, 20- or 30-year fixed-rate mortgage, and I say go for it.

If you are thinking of refinancing to lower your monthly payment, I would encourage all Portland homeowners to take a critical look at their finances and decide whether it’s really worth it. Refinancing usually comes with a boatload of fees, while selling your home — especially in this market — can give you immediate financial relief and allow you to start over with a home and a mortgage that works for your budget.

Some homeowners might thinking of refinancing with a home equity line of credit to increase their cash on hand. The downside of this, obviously, is you take the equity out of your home and you’ll be back to square one with what you owe on the home. However, it does make sense in some situations. With the way the Portland real estate market has been growing in the past few years, some homeowners may find themselves in a situation where they paid much less for a home than it is worth today. In addition, you may have made improvements to the home that add value which wasn’t there when you took out the mortgage.

The good news is, right now is a great time to sell in Portland. According to the latest RMLS figures, the median sales price for a Portland home in January 2016 was up 8% from the same month last year. Inventory is still low at 1.8 months, and homes average 57 days (much less in hot neighborhoods) on the market before selling.

How much is your home worth? A Portland real estate agent who can do a comparative market analysis on your home and give you an idea of what it might sell for, and how long it would take. This is vital information to have before you make the decision to refinance. Do your research and if you decide to sell, keep in mind that using an agent who is willing to market your home aggressively will give you the upper hand in any market! Check out my listing package here.