With current mortgage rates at record-breaking lows, homeowners across America are refinancing their mortgages in record numbers. Mortgage refinancing, to put it simply, is when you replace your current home loan with a new loan that offers lower interest rates, cuts monthly payments, or the amount of time you have on your loan. Read on to discover why you should consider refinancing your mortgage and how to refinance.
Why Should I Refinance my Mortgage?
Reduce your Monthly Payments. If you are looking to pay less every month, you can refinance your loan to get one with a lower interest rate. Another way to reduce your monthly payments is by extending your mortgage loan term through refinancing.
Tap into your Equity. You can refinance your loan to get cash-out, which allows you to access the equity in your home to cover expenses such as renovating. Remodeling your home can add value to it which makes you more money in the long run.
Pay off your Loan Faster. You can refinance your mortgage from a 30 year to a 15 year term, which reduces the amount of time you spend paying your mortgage and reduces your interest overall. However, your monthly payments will increase.
Get a Fixed-Rate Loan. If you prefer steady payments, you can refinance your variable mortgage loan and get a fixed-rate mortgage where interest rates stay the same. This will prevent fluctuations in your monthly payments.
How do I Refinance my Mortgage?
Set a Goal. You should have a clear reason for refinancing, making sure your new mortgage meets those goals.
Check Your Credit Score. Similar to applying for your first mortgage, you will need a good credit score to qualify for your new mortgage and get awesome rates.
Determine Your Home Equity. To make the most of refinancing, you should have more than 20% equity. Your home equity is the value of your home minus what you owe the lender for your mortgage.
Talk to Your Lender. Discuss your lender refinancing options with a mortgage specialist at Resource Financial Services.
Be Open About Your Finances. Gather all the documents your Resource mortgage banker requests from you regarding your finances. This will include proof of income, pay stubs, tax returns, credit information, assets and liabilities, and home appraisal.
Prepare for The Appraisal. Like any mortgage, your lender will require an appraisal to evaluate your home’s current market value.
Have Money Set Aside for Closing Costs. You will need to pay your closing costs to refinance your mortgage. It is best to have a few thousand dollars set aside for this purpose.
At Resource Financial Services, we are dedicated to your home financing. We love making your dreams of home ownership a reality and we are here to help you make the most of today’s low interest rates with a timely refinance. Visit us online today at rfsmortgage.com to get started. Then contact a Resource Financial Services mortgage banker at 877.797.4545 to discuss your mortgage options and your financial goals. Let us walk you through the process and welcome you home to a better mortgage.