Thinking About Refinancing

Refinancing could reduce your monthly mortgage payment.

The process requires a loan approval to refinance your current mortgage.

With a timely mortgage payment history, satisfactory payments on your other debts, a favorable debt-to-income ratio and sufficient home equity, you may be eligible to refinance your home mortgage loan.

Is it Wise to Refinance Your Home Loan?

The answer depends on your goals and your financial situation.

If you gain desirable financial benefits, it may be wise to refinance.

Mindful considerations should be explored to determine if refinancing is best for you.

Advantages of Refinancing Your Mortgage

The advantages of refinancing will vary among homeowners.

Refinancing into a lower-rate mortgage in AZ, CA or CO. could reduce your current monthly housing payment.

If you have an adjustable-rate mortgage, gaining a fixed rate is one of the greatest advantages of refinancing your mortgage.

Ideally, refinancing your existing mortgage will result in a fixed-rate mortgage, a cash-out transaction or financing terms to pay off your home sooner.

Disadvantages of Refinancing Your Mortgage 

Certain disadvantages might exist when refinancing your mortgage loan.

If you have owned your home for five years or more, refinancing to get the lowest monthly payment could restart your pay-off time frame to 30 years.

Additionally, lending fees could increase the total amount that you owe on your home.

Refinancing Considerations

Break-Even Point - The time that it takes to recoup your refinancing costs is known as the break-even point.

For instance, if you refinanced into a fixed-rate mortgage and your monthly principal and interest payment is $200 lower each month, but your cost to refinance amounts to $3,600, it will take 18 months to recoup your investment.

If you plan to keep your home for at least 18 months, refinancing your mortgage loan may be a wise idea.

Ownership Changes - Certain changes can occur via a refinance transaction.

If a spouse or other borrowers are seeking removal from the deed or the mortgage note, refinancing is a way to facilitate the transaction.

Streamline Refinance - A streamline refinance aims to expedite the standard processing time for an existing government loan that is in good standing. Generally, income documents, a credit review or a home appraisal are not required for a streamline refinance.

If you have paid your bills on time, maintained a favorable credit score, you have equity in your home and your debt-to-income ratio meets qualifying standards, you might qualify for a refinance.

Mindful Money offers mortgage refinance loans in Arizona, California and Colorado.

Apply online today if you are thinking about refinancing or buying another home.

Speak with Samantha Cooley, a licensed mortgage broker with more than 20 years professional experience.