A mortgage refinance creates numerous opportunities for homeowners. Traditionally, homeowners choose to refinance to secure a lower interest rate or change the terms of the loan. There are other advantages to refinancing, as well, depending on your situation.
Are you ready for a mortgage refinance? Do you know someone else who might be? Review our personalized refinance checklist below and if you get a “yes” to one or more of these questions, it might be the right time:
- Can you lower your interest rate? Mortgage interest rates can fluctuate based on the borrower’s financial profile and greater economic influencers. Payment reduction is also vital to review your monthly budget
- Has your credit score improved? If you’ve made your mortgage payments on time, lowered your debt-to-income ratio, and used other credit accounts responsibly, chances are your credit score has improved. A higher credit score can help you refinance into a better loan program with a lower interest rate or shorter loan terms.
- Can you shorten your loan terms? You may have financed your original home purchase with a 30-year fixed-rate mortgage, but after a few years you find you might benefit from a 15-year fixed-rate mortgage. Shorter term mortgages tend to have lower interest rates, and a term refinance can help you take advantage of those lower rates.
- Do you want to convert from adjustable-rate to fixed-rate or vice versa? The advantages of an adjustable-rate and fixed-rate mortgage vary from homeowner to homeowner. Whether your original mortgage was an adjustable-rate or a fixed-rate, the current interest rate environment may be better suited for the other type.
- Do you want to tap into home equity? As home values continue to rise, many homeowners are considering withdrawing home equity to use for home improvements, to pay down debts, or to meet other financial goals. If your home has appreciated in value since its purchase, and you have at least 20% equity in your home, a cash-out refinance or refinance into a Home Equity Line of Credit may be a great option for you.
If you answered “yes” to one or more of the questions above, or you know someone that would, we should talk! Before pursuing a mortgage refinance, it is best to have me review the specific situation to determine whether or not it’s the right move. Let's make 2019 wonderful !
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