If refinancing will save you money, help you build equity and pay off your mortgage faster, it’s a good decision. And with rates as low as they’ve been in quite a while, even people who have fairly new mortgages may benefit from refinancing.
When Is It a Good Idea to Refinance Your Mortgage?
If you can lower your interest rate over 1/3 of a percentage, it is a good idea to call your professional to refinance. 1/3 of a percentage will save you a ton of money in interests and also may reduce your payment.
Mortgage interest rates are determined by market factors, including the yields on long-term Treasury bonds. The best rates and terms go to those with the best credit. So the question of when to refinance is not just about interest rates; it’s about your credit being good enough to qualify for the right refinance loan. Look at your credit relative to when you last financed your home. Maybe your credit score is not as high as you’d like it to be; so long as it is similar to or even slightly higher than the last time you refinanced, you can likely benefit from a refinance in the current market.
Your financial goals, how long you plan to stay in your home, how much equity you have in the home and your overall financial condition are important considerations when it comes to refinancing. Luckily, at Megastar our trusted professionals will help you to make that decision. We are not out for a quick buck – we just want to help people reach their financial goals.
Is Refinancing Worth It and How Does Refinancing Work?
There are a variety of ways to refinance your mortgage. Finding the right loan depends on your goals. You may want to switch from an adjustable-rate mortgage to a fixed-rate loan that has a steady monthly payment. With rates as low as they are right now, locking into a fixed mortgage is a great way to ensure that your mortgage payment stays consistently low. You may want to shorten the term of your loan from a 30-year to a 15-year and save yourself a bundle in interest charges. This is a great option if it makes sense for you. Megastar has helped people cut 10 years off of their mortgage payment without increasing their monthly payment more than $100!
A refi is also a way to get rid of private mortgage insurance after you have reached 20 percent equity in your home. PMI’s can be a hassle and quickly turn a $1,400 payment into a $1,600 one. We can help you workout a plan to get rid of those pesky PMIs while keeping you at an affordable rate.
What Is a Cash-Out Mortgage Refinance?
Other homeowners go with a cash-out refinance, in which they borrow more than they owe on the home and use the cash to retire credit card debt, pay for home renovations or some other major expense.
Wiping out credit card balances with a lower-interest loan can be a good move. But if you start racking up card balances again, you’re setting yourself back and increasing your risk. Your mortgage is a debt secured by your home. If you start missing mortgage payments, you could lose your home to foreclosure.
How Long Does It Take to Refinance a Mortgage?
The time it takes to refinance depends on your lender as well as how long it takes to complete inspections, appraisals, credit checks and other requirements. But the internet has greatly simplified the process. Megastar often waives appraisal fees to expedite the process.
Use Megastar’s mortgage calculator to compare your own loan scenarios:
- See what happens when you input different mortgage terms (in years or months).
- Reveal the amortization schedule to see how much total interest you would pay.
Good credit can save you lots of money on your mortgage.