Like most financial decisions, deciding to go for a mortgage loan refinance is a completely individual experience. Some homeowners are ideal candidates for a refinancing option, while others might not stand to benefit in the long run. Refinancing a mortgage doesn’t alleviate your debt; it just restructures it. So how do you know whether it’s the right path for you?
It’s best to talk this over one-on-one with a mortgage officer who can look at your particular circumstances and make a recommendation for you. When you meet with them, ask these three questions:
1. Can I Get Lower Monthly Payments?
This is one of the most common reasons people choose to refinance their mortgages. Getting a break on your monthly payments is essential for some people, especially if they want to divert those savings toward a new investment. However, changes in interest rates might mean you don’t actually save money over time. Make sure you talk through your refinancing plan with your mortgage officer so that you can be prepared for this possibility.
2. How Important is a Good Credit Score?
Getting your mortgage refinanced hinges on a few factors, one of the most important being your credit score. You can get a better rate if your credit score is in good shape. Taking time in the 30-45 day range before you refinance in an effort to improve your credit score can end up making a difference.
3. Should I Consolidate My Debt?
Some homeowners have two or more loans associated with their house, and combining these costs into one fixed-rate mortgage can be a smart financial move if they do their research. This action gives homeowners the opportunity to even out their payments over time and help ease some of the financial strain that multiple loans can create.
For more information about your mortgage loan refinance, contact us today.