When mortgage interest rates are low, refinancing is very popular. And right now, mortgage rates are at an all-time low, which makes the idea of refinancing tempting for many property owners.
Choosing to refinance your home loan depends on many things —sometimes it can be a smart financial move, and sometimes it just doesn’t make sense right now. Our title experts are here to discuss three factors homeowners should consider when deciding if refinancing is the right choice, right now.
1. Will You Benefit From Refinancing Long-Term?
Just because the mortgage interest rates are low does not mean it is necessarily time to refinance. Refinancing needs to make sense for you and your family and what your reasons are for financing.
Two of the most common reasons people choose to refinance are:
- Reduce their monthly mortgage payment or;
- Save on their long-term, overall interest
Ideally, the right time to refinance is when you can do both: reduce your monthly payment and save on interest. Although, that does not always happen and that is when you should talk with the title and refinance experts at True Concept Title. We will help you run through scenarios that will show you the cost and potential savings of refinancing. Then, we make closing convenient with mobile title closings anywhere, on your schedule.
2. Do You Qualify For Refinancing?
Just because refinancing makes sense for your personal situation, does not mean you will qualify. Qualifying for a refinanced loan will take more than on-time monthly mortgage payments.
In fact, when you refinance, you will go through an entirely new underwriting process. When this happens, the bank/mortgage lender considers these three factors:
- Your home’s equity > Your home needs to be worth more than the loan value. An appraisal is part of the refi process.
- Your income > Can you afford the new monthly payments?
- Your credit > Are you creditworthy in the bank’s eyes?
Unfortunately, if you—or your home—do not meet any of these factors, it may be difficult to qualify for a refinance.
3. Consider Your Long-term Homeownership Plans
When you are considering the idea of refinancing, make sure you factor in your long-term homeownership plans. In most cases, it makes more sense to refinance if you plan on staying in your home long-term.
Why is this? Most home mortgage refinances can take years before you will break even and start saving. Remember that refinancing is not free, it costs money. On average, refinancing costs several thousand dollars, between paying for application and origination fees, appraisal fees, etc. Talking with a mortgage professional or title expert will help you determine if refinancing now is a smart financial move.
Refinance Today With True Concept Title
Do you feel the time is right to refinance or still have further questions to ask about the process? Let’s figure out if refinancing is a financially smart move for your property.
Remember: you have a choice when it comes to your title and escrow service. Trust the team of True Concept Title and our real estate partners nationwide. Call our Tampa area office at 813-263-7168 and we’ll connect you with a local title representative.