Mortgage rates are still at historic lows, so if you’re thinking of refinancing your mortgage, now is the time to do it. By refinancing, you can lower your monthly payments and reduce the amount of interest you’ll pay over the life of your loan. There are a number of factors to consider when deciding whether or not to refinance, so use this guide to help you decide if it’s the right move for you.
Top 4 things to think about before refinancing:
1) How much money will I save each month by refinancing?
2) What is my current interest rate?
3) What is the new interest rate I am qualified for?
4) What are the closing costs associated with refinancing?
Should I refinance my mortgage?
With interest rates on the rise, now is likely not the ideal time to refinance for many borrowers.
“It’s important to take into account three factors when comparing rates,” says Bill Packer, executive vice president and chief operating officer of mortgage lender American Financial Resources.
“The first is that your approval rate might have changed since you got funding for the home or business loan. You should also consider how much debtors owe now versus then – their credit score could be worse because they’ve had more financial problems than expected which would mean an lower reliable income stream from them as well!” He adds: ‘And finally think about where interest rates will go next- there’s always uncertainty in any economy so it isn’t it.
When it’s a good idea to refinance your mortgage?
If you’re like most people, you have a mortgage. And if you’re like most people, you want to save money on your mortgage. That’s where refinancing comes in. Refinancing your mortgage can save you money on interest and monthly payments, so it’s definitely something to consider if you want to lower your costs and improve your financial situation.
Reasons to refinance mortgage:
o Lower your interest rate: If interest rates have dropped since you first obtained your mortgage, a rate-and-term refinance can provide you with a lower rate.
o Consolidate high-interest debt: If you have a cash-out refinance, it can be used to repay higher interest debts such as credit cards.
o Eliminate private mortgage insurance: If the value of your home has gone up, you could refinance to get rid of paying private mortgage insurance (PMI).
How much can I save by refinancing mortgage?
You can save money by refinancing your home loan. The amount you’ll be able to afford will depend on factors including the interest rate, which is usually around 4%. If this was put into action for a $250k mortgage with 5% closing costs like we saw earlier in our example, then after accounting for all other expenses related-to purchasing property or remodeling it would only leave someone needing 10 thousand dollars more than what they originally owed!
For many people, the idea of paying money upfront for something they will eventually get back is not appealing. Rolling closing costs into your loan and interest rates allows you to spread out those payments over time without feeling like it’s all on one card at once- which means less stress!
There are so many benefits to refinancing your home loans, but you won’t really start seeing them until after the break-even point. This is when it pays off and saves more than what was spent on upfront costs for new financing!
