The quickest way to lower your mortgage payments is a mortgage refinance loan. Mortgage refinance guidelines have seen significant changes over the last year, so speak with a loan officer about your refinancing qualifications. Refinance mortgage options may introduce you to monthly savings of a few hundred dollars.
Why refinance? The lower the rate, the less it costs you for
the money that you borrow. As a general rule, if the interest
rate is 1 1/2 points lower than what you are currently paying,
it's time to refinance. However, something to consider is the
length of time that you plan to own your residence. You want to
be certain that the cost to refinance will be recovered over the
remaining term of the loan; that is, not the number of years left
on your current mortgage loan, but the remaining number of years
you intend to own the property.
Are you looking for a Refinance Loan?
- Bad Credit Refinance
- Refinance for Money
- 2nd Mortgage Refinancing
- FHA Home Refinancing
- Fixed Refinance Loans
- Home Renovation
Although your monthly savings may be substantial, you will incur
some closing costs. Typically you can count on up to 1-2% of the
new loan amount in closing fees in addition to title insurance.
Your lender will estimate your closing costs for you. To justify
refinancing, your closing costs must be recovered over the life
of the new loan. By dividing the closing cost by the number of
months you plan to own your home and add the result to the new
monthly principal and interest payment you will determine if you "break even". If the resulting amount is less than your current
mortgage payment, it is time to refinance.
You may also consider taking "cash-out" to payoff other debts
or to invest. In this case you will need to determine that the
cost to refinance is worthwhile in order to pay off those debts
or invest in other markets. Consider not only the closing costs
associated with refinancing, but the points you will pay for a
lower rate and funds associated with paying off your existing
Ask one of our loan consultants to compare your expenses for
various loan programs. In most cases you will be eligible for
differing loan programs so be sure to consider all of your options.