The Carroll Realty Group - KELLER WILLIAMS REALTY / Metropolitan
The Carroll Realty Group - KELLER WILLIAMS REALTY / Metropolitan

Stephen Carroll Cell: 603-860-0310 | [email protected]
Kris Stone Cell: 603-493-4435 | [email protected]


Posted by The Carroll Realty Group on 5/14/2019

The Mortgage Bankers Association (MBA) refers to mortgage refinancing as a crucial aspect of all mortgages. This is partly because comparatively, low mortgage interest rates have encouraged homeowners to restructure their financial situations using their home equity. Homeowners should base their refinancing decision on their circumstances rather than mortgage interest rates. Here are tips to consider when considering refinancing your mortgage: 

Home Equity

You need to have home equity before you can even consider refinancing your home mortgage. Home values are steadily rising which means that with conventional lenders, you can have enough equity to get a loan. Most lenders will allow a homeowner with at least 20% equity to get credit quickly.

Credit Score 

In recent years, lenders have made the requirement for loan approval stricter. Therefore, some consumers with good credit may not qualify for the lowest interest rates. Typically, the acceptable credit score by most lenders is 760 and above. Borrowers whose credit scores are not up to the satisfactory score may still obtain a new loan but with higher fees or interest rates.

Refinancing Cost

Refinancing costs usually take between three to five percent of the loan amount. Borrowers can look for ways to reduce this cost or incorporate it into the loan. The cost can also be rolled into a new loan if you have enough equity. With some lenders, you are likely to pay an interest rate that is slightly higher to balance the closing cost when you take a loan with them. Make sure that you negotiate and ask several lenders so that you get the best fees for your refinancing loan.

Rates vs. Term 

A borrower needs to have a goal when refinancing to know the exact mortgage product that is most favorable. If all you want is to reduce your monthly payment to the minimum, a loan with a long-term interest rate will be beneficial. If your goal is to pay a reduced interest rate over a short period, you should consider the lowest interest rate in the shortest term. 

Break-Even Point

Before deciding to refinance your mortgage, determine the break-even point. The break-even point is the time at which your monthly savings have covered your refinancing cost. Beyond this point, your monthly savings belong to you. This also means you know how long it will take before your refinancing makes sense if you intend to sell or move from the home in some years.

Mortgage refinancing can be quite confusing, so you need to be sure you completely understand the terms and conditions. Do your research and also speak to a financial planner to give you professional advice.




Categories: Mortgage   refinance   homeowners  


Posted by The Carroll Realty Group on 3/5/2019

If you have just purchased a home, you have the option to refinance your home soon. Just because you can refinance your home doesnít mean that you should. How long you should wait to refinance your home depends on a few things including:


  • Your refinancing goals
  • The rules of your lender
  • If your mortgage has a pre-payment penalty clause

Goals


Your goals for refinancing are among the most important things when considering whether to refinance. Lenders typically wonít refinance a loan that you have secured in the last 120-180 days, so if youíre looking to lower your monthly payments, you may have to shop for a new lender.    


The Type Of Loan You Have


If your financial situation has changed, it may be smart to change the type of loan that you have. Oftentimes, changing the rate and the terms of the loan can give you the extra freedom that you need for your loan and your life. 


Pay Off Your Mortgage Faster


If you do a cash-in refinance, this could be a smart way for you to build equity for your financial future and help you to secure a lower rate for your mortgage. Keep in mind that FHA loans are a bit different when it comes to paying down your mortgage. The FHA streamline program requires that you wait a minimum of 6 months before you refinance. 


Pre-payment Penalties


 Before you refinance your home, youíll need to double-check to ensure that your mortgage doesnít have a pre-payment penalty. If you do have one of these clauses included in your loan agreement, you should consult your lender to make sure that refinancing is a smart move for you.


Lenderís Rules


Every lender has different rules as to how quickly you can refinance your mortgage. You may also need to meet certain qualifications in order to go ahead with the refinancing. 


As tempting as it can be to try and get a lower mortgage rate, you may want to hold off on refinancing for a variety of reasons. Remember that every time you refinance your home, youíll need to pay closing costs and other fees. While it may be a savings in the long term, it could cost you some up front cash. 


The best course of action is ideally to shop for  a lender and a mortgage rate that will suit your needs from the beginning. While no one can completely predict a changing market, you can shop around and find the right rate and loan for you at the time.




Tags: refinancing  
Categories: finances  




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