when should i refinance?

 

Should I Refinance My Mortgage And When Should I Refinance?

Attn: Special Rates Available Until For Residents Of Virginia & Neighboring States!
 

Probably, You Should Refinance.  And You Should Refinance Today.  Rates May Be Going Up.  Mortgage rates have fallen to all-time best levels, so it seems obvious that now is the time to refinance your home before rates go up.  However, borrowers must look at their personal situation, determine what they want to accomplish, before knowing when it's time for a home mortgage refinance.   Please note that Peak Home Loans are experts at getting our clients the hassle-free, low cost, easy approval on the mortgage refinance loan they desire.  Another thing to remember, most people have better credit than they think, usually Fair Credit or better, keep this in mind while filling out our online form.   When contacted by us, kindly ask our loan professional any question you may have.  They will be more than happy to assist you in determining if you should refinance.  Remember, all loans don't fit all people;  if you need a mortgage loan, we'll find the right one for you.  Please click "Full Application" to get started.

In the past, it was common for the recommendation to be a mortgage rate reduction of at least 1%, meaning that when the rates were 1% lower than what a borrower's existing mortgage rate was, then it was a good time to good time to refinance, according to Answers. COM. This recommendation has been changing and it's now often seen to be a little less than a 1% reduction.

This is really a personal decision that the borrower must make since any Mortgage Refinance is going to cost money, says WellsFargo.com.   There is also a lot of paperwork involved in a traditional refinance that takes time to process.

Knowing how long a borrower is going to remain in the home will help with the decision.  As a rule, borrowers should aim to break even with the cost of refinancing in less than 3 years.   The value of the home is extremely significant, especially after the housing market decline.  With a traditional refinance, borrowers should go for no more than an 80% loan, preferably lower, so that there is no need for private mortgage insurance.  When it comes to mortgage rates, borrowers should know their credit scores and work to get them as high as possible. With higher credit scores, the best and lowest mortgage rates will be offered.  Employment will need to be documented, so be prepared especially if self employed, which may require additional documentation.  If a borrower depends on the mortgage interest deduction when completing income taxes, then a refinance to lower mortgage rates may not be the best thing.  With lower mortgage rates, less interest is paid annually.  For many borrowers, the standard deduction will be higher than the mortgage interest deduction which will no longer be significant.

Finally, for borrowers who want to refinance, guidelines and mortgage rates will differ from lender to lender.  For this reason, borrowers should be prepared to shop around for the best offer available for their circumstances.  Borrowers should have an idea of what they want, what rate they will settle for and what monthly mortgage payment they would like to pay.  This provides them with a general guideline when shopping around.  For the best mortgage rates available, the online form can be completed and submitted with minimal information required.  Borrowers who use this method will receive a response within 48 hours of submission.

should i refinance

Here Are Some Things To Ask Yourself...

1.)  How is your credit rating?

The best rates and fees go to those with the best credit scores.  it's worth checking your FICO score and report before you shop for a home mortgage.  You need to have a score that is above 580.  You may obtain your free credit report at http://www.AnnualCreditReport.com.

2.)  What is your present home worth, what do you owe?

Checkout recent sales in your area, a realtor may be able to help.  If your home is worth less than you owe, you are "underwater" and may be unable to sell your house.  If your current loan balance is small, say $40,000 or less, you will not save much by refinancing.  Otherwise, you are in good shape to refinance.

3.)  Will you be selling your house in the near future?

Remember, It takes about 3 years to recover the money you spend on a new mortgage.  When you go to closing, you will be paying many fees, some "junk fees" to your lender.  The total amount of fees is known as closing costs.  These closing costs can run into the thousands of dollars.  Your monthly payment savings may not offset the closing costs if you sell your home within only a year or two.

4.)  Will you make the best deal you can?

Remember, everything is negotiable - even mortgages.   Interest rates and fees change on a day-to-day basis.  Federal laws change.  When loan shopping, ask for a printout that gives you an estimate of the closing costs.  Additionally, ask for a receipt for any fee paid to a third-party service including, the appraisal, document notarizing, your credit report, points, and more - you may be able to lower your closing costs this way.

You may also lower your closing costs in another way by paying a yield spread premium (the reverse of paying points.)   You will get a higher interest rate, the lender will pay the mortgage broker, and the mortgage broker will charge you less fees for your loan, or even no fees, this would be called a "no closing-cost loan."   If you plan to sell your house within 2 to 4 years, this option would be sensible, especially if even with the higher interest rate, you will be paying less monthly than you do now.  The bottom line is...   If you can save one percentage point, take advantage and refinance now.