Common Reasons to Refinance

Common Reasons to Refinance

There is an old adage that says if you can improve your interest rate by at least two percentage points, then it is a good time to refinance. While that may work as a general rule of thumb, the truth is there are other reasons to refinance:

Lower your interest rate
Securing a lower interest rate is one of the top reasons for refinancing. This can make a big difference in your monthly out-of-pocket costs for housing and save money on financing fees.

Build equity faster
If you are in a position to make higher monthly payments due to an increase in salary or other good fortune, you may want to switch from a 30-year loan program into a 15 or 20-year loan structure. This enables you to build equity faster and save a tremendous amount of money on financing fees.

Change your loan program
Many homeowners who start with Adjustable Rate Mortgages desire to move to the stability of a Fixed Rate mortgage later on down the road. As interest rates fluctuate, making original deals less attractive, people will change their loan programs in order to capitalize on the best rates available.

We can provide you with loan comparison charts to find out what you can save with various loan programs.

Credit score has improved
If your credit score has improved as a result of making your mortgage payments on time and in full, you may be in a position to take advantage of your improved credit standing.

We can review your current credit score, the terms of your existing mortgage, and review options for other loan programs that could not only reduce your monthly payment, but also save on interest fees paid over the life of the loan.

Use the equity you have established
A cash-out refinance allows you to tap into the equity you have built up in your home. You may want to pay off revolving credit card accounts, send a child to college, or use the money for home improvements or personal expenses.

Regardless of your reasons for wanting to refinance, my team and I are interested in helping you make a decision that works best for you.

We will begin by reviewing the terms of your existing mortgage program. It will be important for us to know the purpose of the refinance and how long you plan to stay in the home. This helps us to determine whether or not it is beneficial for you to pay points up front to secure a lower interest rate on your new financing.

Throughout the process, we will present you with spreadsheets outlining various loan programs, and continue to monitor rates in order to inform you of the best time to refinance.

What Should I Look For In A Loan Officer?

In today’s ever changing real estate market, it just doesn’t make sense to gamble with your home loan. When evaluating a potential loan officer it is important to understand the background of the individual loan officer as well as the company they represent. Don’t be afraid to ask questions like:

How long has your firm been writing residential mortgages?

Are you licensed in my state?

What types of loans can you offer?

Do you process and underwrite in-house?

Do you offer automated underwriting?

It is important to know that your loan officer and his/her company are experienced and well-established so they will be there for your closing, and hopefully many future transactions

Available Mortgage Loan Products

Purchase Transactions including first and second trust mortgages

Refinance Transactions for Rate and Term as well as Cash-Out Refinances

Stand-Alone Second Mortgages (Home Equity Loans -HELOAN and Home Equity Lines of Credit -HELOC)

Construction Loans

Government Loans such as VA and FHA

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