By Ted Lyons, Brighton Branch Manager
Refinancing your home can be a great financial tool to lower your interest rate, shorten the loan term, decrease your monthly payment, or convert one sort of asset (equity in your home) into another (cash in your hands). Here are some tricks of the trade that can help you take advantage of this strategy:
What are the two basic reasons I might refinance my mortgage?
With some limited exceptions, most people refinance their home to lower their interest rate, shorten the term of their mortgage, or decrease the payment by extending the loan over a longer time (rate/term refinances). There are also instances where it makes sense to utilize the equity from one’s home, in order to help accomplish both financial and personal goals – such as cash out refinances.
How do I know if refinancing my home is an option for me right now?
Two of the most important things to understand when you are considering refinancing your home are – how much do I owe on my home now, and how much is it worth?
What factors influence the rate on my new mortgage?
The factors that determine your new rate are: credit score, payment history, and how much of the new mortgage represents your home’s value.
Refinancing your home can be a smart move for you. It may be complicated, but it should never be mysterious – just make sure to pick the right lender to have in your corner!