Refinance Now or Wait? How to Determine the Best Time to Refinance Your Mortgage

Refinance Now or Wait? How to Determine the Best Time to Refinance Your MortgageRefinancing your mortgage is a great way to reduce your monthly payments or take out some of the equity in your home to reinvest in renovations, upgrades or in other areas in your financial portfolio.

Let’s take a quick look at a few questions that you can ask yourself in order to determine whether you should refinance now or wait until sometime in the future.

Can You Lock In A Lower Interest Rate?

Depending on when you first purchased your home and took out your mortgage, you may find that by refinancing now you can lock in a lower interest rate.

Getting a lower rate can end up saving you thousands of dollars a year in interest, but you’ll need to weigh the closing costs of the refinancing against the savings you’ll obtain to ensure that refinancing is worthwhile.

How Much Do You Owe On The Home?

If you still owe a significant amount on your home you may find that it’s worth refinancing, especially if you’re confident that you won’t be selling the home any time soon. Conversely, if you’re very close to having your mortgage paid off you may find that refinancing has little benefit.

Do You Need To Tap Into Your Home Equity?

If you feel that now is the time to tap into the equity you’ve built up in your home over time in order to cover renovation or upgrade costs you may want to consider refinancing. This will allow you to take out a large chunk of cash without having to open a new loan or line of credit. If possible, try to secure a lower interest rate for added benefit.

Do You Plan On Moving?

If you’re planning on moving in the next couple of years then you may want to hold off on refinancing your mortgage. As mentioned above, there are closing costs attached with a refinancing deal and these must be factored in when assessing whether or not you stand to gain or lose.

If you’re staying in your home for the near future there’s a far better chance that the costs of a refinancing will be covered by the amount that you save.

Every financial situation is unique, and you may find that you have other questions about refinancing that aren’t listed above. Don’t hesitate to contact your mortgage professional as they’ve worked with all sorts of refinancing clients and can share helpful advice that is relevant to your situation.

Refi or Wait? How to Choose Between Refinancing Your Mortgage Now or Waiting Until You Need the Money

Refi or Wait? How to Choose Between Refinancing Your Mortgage Now or Waiting Until You Need the MoneyRefinancing your existing mortgage may provide you with the opportunity to lower your interest rate, reduce your mortgage payment and adjust your loan term. For those homeowners who have lived in their home for more than a few years, pulling equity out of the property for everything from a luxurious vacation to making home improvements is a tempting potential benefit.

However, with property values and interest rates adjusting frequently, you may wonder if now is the best time to refinance your mortgage.

Using Equity From Your Refinance

One factor to consider when debating between refinancing now and waiting relates to pulling equity out of your home. If you need access to the cash now for home improvements or other purposes, refinancing now may be ideal. Even if you do not need access to your equity for several months or longer, you can lock in today’s rates and invest the money in other vehicles, such as CDs or bonds, until you need the cash.

Anticipating Market Changes

You may have heard that the interest rates for home mortgages have been slowly rising, and while they remain close to historic lows, they are projected to continue to rise. Nobody can predict with certainty how interest rates will adjust in the next few months and years, and locking in today’s rates may be beneficial. Keep in mind that if rates decline significantly in the near future, you can always look into refinancing again.

Reducing Your Principal

If you have a higher interest rate on your existing mortgage, your principal balance may be reduced at a slower rate than if you refinance to a lower interest rate. In addition, if you refinance from a 30-year term to a shorter term length, your principal balance will also be reduced more quickly in most cases. In many situations, refinancing your home mortgage today may establish a more efficient repayment schedule that allows you to accrue equity at a faster rate.

Each homeowner has unique factors to consider when refinancing based on property value, credit rating, existing loan terms and other factors. While many will benefit by refinancing an existing mortgage today, you can speak with a mortgage professional for specific advice and recommendations regarding your situation. Call your trusted mortgage representative today to inquire about the options and to begin working on your refinance loan application.

An Insider’s Guide to Reducing Your Remaining Mortgage Years Through a Smart Refinance

An Insider's Guide to Reducing Your Remaining Mortgage Years Through a Smart RefinanceIs it always the best idea to pay off a mortgage over 30 years? While it may help a homeowner lower his or her monthly payment, it can mean paying more in interest and waiting several more years to build sufficient equity in the home.

The question is…how can a homeowner reduce the amount of time it takes to pay off a mortgage by refinancing his or her loan? A few methods for reducing your mortgage term are explained below.

Refinance From A 30-Year Mortgage To A 15-Year Mortgage

For those who don’t want to wait any longer than necessary to pay off their home loan, it may be possible to refinance to a shorter-term mortgage. Instead of taking 30 years to pay off the loan, a homeowner can opt to pay off the loan in 10 years or 15 years. The shorter the term, the less interest will be paid on the loan.

Get A Lower Interest Rate With A Shorter-Term Mortgage

Another good reason to shorten a mortgage term is because it could lower the loan’s interest rate. Instead of paying 4.5 percent over 30 years, it may be possible to pay 4 percent over 15 years. This gives the mortgage holder the chance to build equity in the home faster as they are paying more of the principal balance with each payment. While a mortgage holder can pay more than the minimum amount on a longer-term mortgage each month, it could still end up costing more overall due to the terms of the loan. Be sure to ask your mortgage professional about your options here.

Stop Paying Mortgage Insurance

Those who are paying mortgage insurance could be paying $200 or more per month for nothing more than the right to protect the lender against default. Homeowners who could qualify for a conventional loan should attempt to refinance to a conventional loan if possible to avoid making this payment. Instead of going toward mortgage insurance, put that money toward the principal balance on the loan. There are, of course, risks involved with this approach so be sure to fully discuss them with a professional.

How Can Someone Refinance A Loan?

Now that you know how to pay off your mortgage faster through a refinance, how can someone go about refinancing a home loan? Fortunately, refinancing is similar to the process of securing the home’s first loan. All a borrower will need to do is find a lender that he or she wants to work with, find an offer that works for that borrower and then close on the deal. Although there may be closing costs associated with the new loan, some lenders may be willing to waive some or all of them on a refinance.

Paying off a mortgage as soon as possible can help a borrower save money while building equity in the home at a faster pace. This gives a homeowner financial strength as well as the flexibility to sell the house in the future without worrying about losing money in the deal. To find out more about refinancing options, talk to a mortgage lender.