10 Tips To Refinancing Your Home.

10 Tips To Refinancing Your Home.

The bad news is that we are currently living through a frightening economy. The good news is that mortgage rates have never been this low in the last half of a century. The mortgage process, for buyers as well as home owners is a challenge at best but if you are prepared you can save money AND get through the process with your sanity in tact!

Why should you refinance? There are costs involved with the process, but if you plan to stay in your home long term (five to 15 years) then with current low rates you should consider it! What are some potential benefits from a refinance?

1. If you are in an adjustable rate mortgage, then NOW is the time to check and see if you can convert into a more stable fixed rate mortgage.
2. If you are in an interest rate on a 30 year that is over 5% and you have good credit then you might realize substantial savings on a monthly basis. Even a savings of $50 a month will save you $600 a year.
3. If you extend your term your payments will become more manageable throughout our current economy.
4. If you are currently in a 30 year, rates are so low that you might consider switching to a 15 year loan—your payment would be slightly higher but you save 15 YEARS of payments and interest.

Here are some things to consider when considering a refinance to make the process go smoother and to determine if a refinance is for you at this time:

1. How is your credit? Know your credit rating and how much you currently low on outstanding debts.  Your credit score will help to determine the rate of your new loan.
2. What is the Value of Your Home? Even if your credit is outstanding, the value of your home will determine IF you can refinance as well as how much your payment will be with and without mortgage insurance.
3. Know Why You Are Refinancing: Are you switching from an adjustable rate to a fixed? Just looking for a lower rate? Switching to a different term?
4. Do you currently have a prepayment penalty on your home loan? Some existing adjustable rate mortgages still carry a valid pre payment penalty for refinancing the loan, check your old loan documents or call your lender to see if this applies to you and how it might affect a refinance.
5. Do You Have Steady Employment? Your lender will require a 24 month employment history in the same or similar industry.  However, if you have been unemployed during that time and are currently back in the workforce your lender CAN bridge one job to another using your unemployment compensation in between.

6. Calculate Your Savings in Advance: Mortgage calculators are available online and you might check out potential savings by using different rates on the amount you need to borrow before you call your loan officer.

If you are prepared to refinance, know why you are doing it and have a plan, the process will go much smoother.  Share your refinance input here scrow@ firstcapitalmtg.com (what rate did you get?) , or give us a call: 818-458-0010
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