It would be amazing if we were able to obtain affordable mortgages for our homes at equally amazing interest rates. Unfortunately, the world isn’t perfect, and to allow something like this to happen, the only mortgages that we’d be able to get are ones that cost a great deal of money. Thankfully, the option to refinance a mortgage is always there, and taking advantage of this option at just the right time is a great way to save upwards of thousands of dollars every single year.
Here are three signs to look for when deciding if refinancing a mortgage is right for you/
Credit Score and Income
When it comes to the different factors that lenders begin to look at in terms of approving or denying an application for a mortgage, the two most important ones are your credit score and income. In terms of your income, this helps to play a role in your debt-to-income ratio, which essentially shows how much you owe versus how much money you make, and lenders want to be sure that you can make enough money to pay your mortgage every month. When it comes to your credit score, this is basically a measurement of your overall financial responsibility and shows how well you’ve handled previous loans and lines of credit. If both of these things are high, not only will they increase your chances of getting approved for a mortgage, but they can also get you the best interest rates as well. Even better is the fact that if they have increased since your first mortgage, refinancing may be a good option to consider, as your lender may be willing to offer you a much better deal this time around.
How Far Along is Your Loan?
There are some mortgage lenders who simply care more about their bottom line than they do about their actual clients. If you aren’t happy with your current lender, it may be a good idea to consider refinancing with a different company that may have a much better reputation to their name. Unfortunately, this means that you will run the risk of having to pay closing costs all over again. If you happen to be close to the end of your loan, it may be a better idea to stick with your current lender rather than attempting to refinance.
Check the Interest Rates
If you originally purchased your home when interest rates were high, yet they are much lower now, you could end up saving thousands of dollars if you choose to refinance your mortgage. Doing so will help to get you a lower monthly payment; however, as previously mentioned, you will run the risk of having to pay closing costs all over again. Additionally, you will also be extending the amount of time you’ll be paying for your home unless you’re shortening your mortgage term when you refinance. On the other hand, you also have the option of always paying more than the minimum payment, meaning it won’t always take you the full amount of time to repay the full cost.
Thank you for taking the time to visit our blog, and we’re glad to have helped you learn more about if you should refinance your mortgage. We specialize in Corpus Christi real estate, and we also inform readers about what is up-and-coming in the Corpus Christi community.