When to Refinance?
Refinancing a mortgage means paying off an existing loan and replacing it with a new one.The most common questions homeowner asks “When Should I Refinance?” There are many common reasons why homeowners refinance:
- The opportunity to obtain a lower interest rate; the chance to shorten the term of their mortgage.
- The desire to convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa.
- The opportunity to tap a home’s equity in order to finance a large purchase; and the desire to consolidate debt.
Some of these motivations have benefits and pitfalls. And because refinancing can cost anywhere from between 1% and 3% of the loan’s principal, it’s important for a homeowner to determine whether his or her reason for refinancing offers true benefit.
Generally speaking now these days the rule of thumb is that it is worth the money to refinance if you can reduce your interest rate by at least 1%. Reducing your interest rate not only helps you save money, but it increases the rate at which you build equity in your home, and it can decrease the size of your monthly payment. If you refinance, your total finance charges may be higher over the life of the loan.y
Things to Consider before refinancing
- Will you be able to recover the closing cost added to new refinance loan within less than 31 months?
- Should you take Cash-out Mortgage Refinance or Home Equity Loan?
- Can Mortgage Refinance at a Higher Rate Make Sense?
- Do Savings on a Mortgage Refinance Make a Good Deal?
- Should you refinance a Mortgage to Improve Credit?
- Is Now the Time to Refinance an Adjustable Rate Mortgage Into a Fixed Rate Mortgage?
Our Certified Mortgage Planner Specialists will guide you through each stage of the process and provide you with expert advice along the way. We are committed to making the home refinance process clear, informative, and simple. At Guardian Mortgage, we understand that you want to get the best refinance deal. That’s why we are committed to providing you with the information you need to make well informed decisions.
