|
Interest RatesJust like buying a home, refinancing a mortgage isn't a decision you make likely- it'd best to do your homework first. Every borrower has a different situation and budget. Even if you see rates drop it doesn't necessarily mean it makes sense for you to refinance your mortgage. So when should you refinance your mortgage? We're going to take you through the factors you will need to consider before you make a decision.
|
|
Why do you want to refinance?
There are many scenarios and reasons you may have to refinance. It is good to know what your expectations are behind your decision. Here are a few good questions to ask yourself:
|
What kind of mortgage do you currently have?
Do you have a fixed rate? An ARM balloon? What kind of mortgage you have can have influence on whether its good time to refinance or not. If you currently have a fixed rate mortgage, and you bought your home in recent years when rates where "historically low", its in your best interest to consider if it will save you money in the long run.
If you have an adjustable mortgage or a balloon note, you should absolutely check to see if refinancing makes sense for you. In many cases, you may be required to finance. Also check to see if your mortgage has a "prepayment penalty", which will require you to pay a percentage of your mortgage just to get out of it, because that could be a deal breaker. |
Weigh your options
If your goal is to get a better rate to pay off your house faster, see if you can just pay extra to your principle instead, especially if rates are only a point or two lower than what you have. Going this route will make sense if you do not have many years left to pay on your mortgage. It can also make sense if you just want a shorter term.
If you have some wiggle room in your current budget and think you can afford to afford to pay a little extra each month, you can rack up some big savings on your current mortgage without tacking on extra closing costs with a refinance. For every extra dollar you pay, you save interest on your loan. |
Can you refinance?
Before you decide to refinance, you need to make sure you can qualify. Here are some of the factors in qualifying.
|
There are a lot of important factors when considering refinancing. If you should have any more questions or need more advice for getting started, give us a call at 619-Low-Rate and talk to a loan officer about your options. To get started on an application, click below: