Should You Refinance?

Do you remember signing a seemingly insurmountable stack of papers to buy your house and get your mortgage?  Why would you want to do this again?

In essence, if your rate is higher than what you can currently get, you may want to consider refinancing.  Here are some questions to ask yourself:


1.  Take a look into the future

Are you planning on moving soon?  How soon?  Figure out at what point your new rate will pay for the cost of refinancing.  Is this point before you are planning on moving?  

If you currently have a 30 year mortgage, or less, and are planning on refinancing to a 30 year mortgage, your payments will decrease!  Factoring in this lower payment increases the incentive to refinance.

If your goal is to gain equity more quickly, think about refinancing to a shorter term mortgage.  A 15 year mortgage traditionally has a lower interest rate than a 30 year mortgage.  A 15 year mortgage will also build equity twice as fast.


2.  Your current equity

What is your current equity position?  Do you hold 20% equity?  For a traditional loan, without mortgage insurance, you will be required to have 20% equity.  They good news is that, if you haven't quite made it to the 20% mark, your house may have increased in value to the point of creating a 20% equity to 80% loan ratio.  

Contact me to get a free CMA to see what your house is worth. 

Speak with a mortgage adviser to see if there are any programs available for your loan to equity situation. 


3.  Your Credit


Consider your current credit score.  Do you have a high enough credit to be approved for a new mortgage?  If not, paying off credit card balances will increase your credit score and help you get that lower rate.  Don't hesitate to contact a mortgage adviser to help guide you through this process. 



Have you refinanced your home?  How did the process go? Leave a comment below.