Thinking About Refinancing? Answer These Questions First
Posted by : Admin
Refinancing your home mortgage loan may be tempting. You may hear the time is right on the news or know friends and family who have recently refinanced. But is it the right time for YOU to refinance? If you’re considering it, answer these questions first before deciding.
Can you get a better interest rate?
If you bought your home several years ago, your interest rate may have been higher than it is now. Or credit issues could have required you to get one of the home loans for bad credit. If you could qualify for a mortgage with an interest rate of one percentage point or lower, it may be time to refinance.
Could your budget benefit from a lower monthly payment?
Maybe your monthly mortgage payment is breaking your budget. You could have had fewer payments than you do now, or you may have had a two-person income and now only have one. Whatever the reason, if you’re struggling to meet your mortgage payment every month, refinancing could decrease it and give you some breathing room
Do you need money for a large purchase?
Is it time for a new vehicle, or are you getting ready to pay for your child’s college education? If you have built up equity in your home, you could tap into it to finance these expenditures. A cash-out refinance may be just what you need to avoid going into debt.
Does your home need renovations?
If your roof needs to be replaced, your foundation needs to be repaired, or your kitchen needs updating, tapping into your equity could be the best decision. Keep in mind that, depending on the amount you need, your monthly payments and/or the length of your loan may increase. Your loan officer can run the numbers for you.
Could you get out of paying PMI?
When you bought your home, you may not have had enough of a down payment to avoid Private Mortgage Insurance (PMI). This is added into your monthly payment and can be a significant amount. If your home has increased in value or you have paid on your loan for a few years, refinancing could get you out from under PMI.
Could you refinance to a shorter-term loan?
Are you eyeing retirement, or just want to speed up paying off your mortgage? Depending on how much you’ve already paid and the interest rate available, you could benefit greatly from refinancing. It may even be possible to keep your monthly payments almost the same while shaving years off your note.
Considering all of your refinancing options is a smart thing to do, especially if interest rates are low or you have pressing needs for your home’s equity. By weighing the pros and cons, and talking to a professional loan officer, you’ll be able to decide if refinancing is right for your personal financial goals.
Do you need advice and assistance with your refinancing options? Contact Mortage Investors Group today, and let us help you decide if it’s a good move.
