The Beginners Guide to Refinancing Your Home
Making the decision to refinance your home isn’t something you should do lightly. It involves taking out an entirely new loan and, if you’re not careful, can end up making your financial situation more complicated than it needs to be. You need to make sure you’re going about the process the right way. Luckily, the process is simple and once you start, you’ll be able to get the right loan for your needs quickly.
Decide Why You Want to Refinance
Before you can start looking at mortgage rates, you need to figure out why you want to refinance your home. Are you looking to free up cash by using the equity you’ve built in the house? Do you want to take advantage of low interest rates or speed up your loan repayment? Or do you want to get rid of credit card debt by rolling it into a newly refinanced mortgage? Understanding your goals will help you choose the right mortgage.
Make Sure It Will Save You Money
Believe it or not, refinancing may not always save you money. It all depends on your personal financial situation. Take a look at your current mortgage and make sure refinancing will lower your interest rate or reduce your monthly payments before you apply. If your current mortgage is close to the market rate, you may want to keep it.
Start Getting Quotes
If refinancing your home will save you money, start shopping for new home loans. Try to get quotes from different providers and compare the rates and loan amounts they offer you. You’ll want to choose the lender that offers the best loan terms and principal amounts.
Understand the Closing Costs and Close on the Loan
Unfortunately, you’ll need to pay closing costs on the loan anytime you refinance your home. These costs vary from lender to lender and you need to make sure you understand what they are and how you’ll pay for them before you accept the money. Your loan provider should walk you through those numbers before you sign on the dotted line. If you accept the costs and can pay them, you’re ready to close on the loan and start simplifying your debt situation.
Is Refinancing Right for You?
If you’re wondering if the time is right to refinance your home, don’t handle it on your own. Contact our team and speak with one of our experienced representatives about your financial situation.