When Should a Homeowner Consider Refinancing?: 4 Possibilities

From time to time, many homeowners consider the best time to refinance and replace their existing mortgages. Since interest rates fluctuate and no one has a so-called crystal ball, it makes much more sense to seriously consider and assess when it might make sense to do so and when to keep what you want. currently have. A wise owner proceeds wisely in their best interests, and with that in mind, this article will briefly attempt to consider, examine, review, and discuss 4 important considerations that every homeowner must be aware of, and understand, in order to proceed wisely.

1. It depends on the current credit of the owner and the appraised value of the house: While many people maintain, or improve, their personal credit rating, from the time of their original mortgage to the present, some have experienced some financial setbacks or other adverse conditions/scenarios, which could make them appear less credit worthy! Also, whether you originally bought your home for less than the current appraised value is also a key factor. Those with better credit may qualify for a more attractive mortgage interest rate than others. Closing costs, etc., should also be factored in to determine if this makes sense.

two. Existing Mortgage Terms/Length: If you’re locked into a lower interest rate for the longer term, there may be little point in refinancing. However, for those with some type of term/adjustable rate vehicle, under certain circumstances, it may be a good time to refinance! For example, suppose someone currently has a 7/30 mortgage, that is, a fixed rate for the first seven years, and then adjusts it, if it is currently three to six years old, and current interest rates are historically low. , and you are not comfortable, with the prospects, in the future, when your rate will change, you should consider your options.

3. Current interest rates: Are today’s rates historically low or high? Do financial/economic experts believe they will remain so in the long run and why? How might the rate change work, either for or against you?

Four. Refinancing Costs: Remember, when one refinance, he often faces hefty refinancing costs, including taxes (in some states), appraisal fees, filing fees and other charges, often lumped together in one category called Closing Costs. How many years, at a more advantageous rate, would it take to offset and pay these additional charges?

Wise owners, recognize and understand that times and conditions change, evolve and act accordingly! Will you pay close attention to the possibilities and what might make the most sense to you?