Should You Refinance Your Home?

When you’ve lived in your home for a few years, things tend to change as time goes by. The value of your home usually increases. Your credit score improves as long as you pay your mortgage on time. Mortgage interest rates go down for the general public. Put these three things together, and it’s possible you could pay less for your current mortgage. You might want to consider refinancing your mortgage.

 

According to a recent report from Black Knight Financial Services, 4.5 million homeowners are currently eligible to refinance. The average borrower may save around $260 a month, and 700,000 owners could save $400 or more each month. Do you wonder if you should refinance your home? Here are a few reasons to consider it, and a few reasons to pass.

 

Reasons to Refinance

 

Every homeowner’s situation is unique, and refinancing a 30 year mortgage is a big deal. If you wonder whether it’s a good idea for you, see if any of these reasons apply to you.

 

  • You want to save money on your mortgage.
  • You plan on living in your current home for many years.
  • You have a higher interest rate than current mortgage rates you hear about.
  • You need to switch to a fixed rate mortgage from an adjustable rate mortgage.
  • You want to pull out the equity to pay for a home remodel or college tuition.
  • You need to consolidate old debt.

 

Just because you have a good reason to refinance doesn’t mean you’ll be able to. Make sure to talk to a lender to find out if you qualify and what you’ll need to do to refinance your mortgage.

 

Reasons to Hold Off on a Refinance

 

Not everyone should or needs to refinance their home. You may want to and not be in a good position to do so right now or it may not save you money. Here are a few reasons why you may need to hold off on refinancing right now.

 

  • Your loan is underwater, and you owe more than your home is worth. Wait until you pay the mortgage down or values improve.
  • Your credit score is too low to qualify for the best rates. Keep paying your bills on time and rebuild your credit history.
  • You plan to move in a couple of years. Refinance now, and you’ll get a lower interest rate, but you may make a bigger home unaffordable for yourself if the interest rate on your next purchase increases one or two percent.
  • Your current interest rate is relatively low. You won’t see any actual savings.

 

If you’re curious about how you can save money on your current mortgage or whether you’re a good candidate to refinance, talk to a mortgage lender. When you’re ready to buy your next home, work with a real estate professional.

Comments

  1. Hi, This is a good post, indeed a great job.. You must have done good research for the work, i appreciate your efforts.. Looking for more updates from your side.

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