When Do You Need To Refinance Your Mortgage?

How do you know when to refinance? When is the right time to refinance? What are the signs to look for in a refinance? These are questions that many of us have asked ourselves. To be quite honest, many of us do not know the answers or the signs to look for in a refinance. We are here to help you in this important decision. Here at Mortgage.info we try to cover the most important questions and concerns when it comes to mortgages and refinancing.

The most important part of a refinance is saving money. When you refinance you want to either save money now or save money on the long end. Saving money now can be a few ways. You might want to refinance your mortgage and get money out of your home now to pay off debt. Poor choice with credit cards can land you in financial trouble. A refinance might can help you pay off your debt by getting cash out as part of equity. This is not always a good idea but if your debt service is hundreds of dollars per month, you could possibly save money by refinancing and getting the cards paid off. Especially if you are planning on staying at the home for a long amount of time.

Saving money in the long end is important as well. You might be able to refinance your mortgage and take years off the loan. For example, if you have a 30 year loan and have been at your home for 7 years. You might have the opportunity to refinance your home on 15 years, cut 8 years off the loan, and continue to have close to the same payment amount. That can be accomplished if the rates have dropped enough to make up the difference in payments and years remaining.

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Another important aspect to look at when refinancing your mortgage is whether or not you are currently paying mortgage insurance. If you are, you can refinance your home and actually pay a higher interest rate and still save money. Mortgage insurance is insurance that you must pay to protect the loan in case you default. Most homebuyers look at this as a waste of money. They do not feel they are a risk for default. Some people pay in the hundreds of dollars per month on this without a choice. Depending on the lender, generally if the loan to value amount is under 20% you will be forced to pay this fee. This fee is a part of your mortgage payment as long as you are under the 20%. Once you get over that amount, you can have a new appraisal completed and get this fee removed.

My advice is to speak to a trusted mortgage lender in your area. They will want to ask you a lot of questions to help guide you in the right direction. Most of them will want your business but they are also very professional in most cases and will help steer you get the loan you need.



Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info

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