If you’re like millions of Americans, you’ve probably accumulated a good deal of debt with lots of different lenders. Perhaps you have three credit cards, two cars, and some medical bills that need to be paid. If you have some substantial equity in your home (which is the value of your home minus what you owe on it), you might be thinking about refinancing, but is now the best timing for refinancing? After all, interest rates keep fluctuating greatly. Don’t let that scare you, interest rates are still quite low. Article Source: Low Interest Rates Cause Surge in Refinance
There are two main reasons people choose to refinance. The first reason is so they can consolidate all their debts, making money management much more straightforward. The second factor that often drives consumers to refinance is so they can pay off their mortgage faster. It doesn’t always have to be lower interest rates that are the motivation behind refinancing. You might choose to go with a 15-year loan instead of a 30-year loan, which could reduce your overall debt significantly.
What is the Best Time?
When it comes to the best timing for refinancing, it really depends on your unique situation. The question is, what is your potential debt-reduction compared to the cost of refinancing, and how long will it take you to realize it. The best time to refinance is whenever you can achieve the most money. If refinancing your mortgage will hurt you in the future, you should wait.
How to Choose your New Lender
Mortgage lenders are a dime a dozen. You can apply for a mortgage with an internet based lender located just about anywhere. It only requires a little time and a few clicks of your mouse to apply for a loan, but you have better options. You don’t just need a lender, you need an advocate, someone with your best interests in mind. You need a home mortgage professional that will make suggestions based on your unique financial situation and not try to convince you to settle for a loan that isn’t right for you.
Another thing to consider when choosing the right company for your refinancing loan is fees. Take a good long look at application fees, your loan origination fees, and any other closing costs. A prospective lender will have to give you a written statement of all of your closing costs. If you can’t afford those fees, or they seem higher than other institutions, keep shopping.
Only you, your CPA, and your local mortgage professional can determine if now is the best timing for you to refinance your home mortgage. To determine that, you’ll have to answer some specific questions about your current financial situation. So, gather up your taxes, bank statements, credit card statements, and current loan paperwork and begin the process of figuring it out. Wouldn’t it be nice to have more money left in your account at the end of every month? Remember, we are here for all of your home lending needs and are always happy to help.
Note: Opinions expressed are solely my own and do not express the views of my employer