Refinance My Mortgage

Why would I ever want to refinance my mortgage in today’s market? As a home owner, I’ve asked myself this question several times especially when I see the property values of my neighboring states fluctuate and even decline! Yet, if I refinance my mortgage, couldn’t I save money by accessing the equity in my home? For myself as well as many other homeowners, there is good news. We can refinance our mortgages if the market value of our homes is right and we have enough equity in our properties. Refinancing is likely a good idea right now since interest rates are at an all time low!

When I first considered to refinance my mortgage, I thought I wanted a lower payment. After speaking with a financial counselor however, I learned this isn’t always beneficial as it may seem due to the closing costs that lenders charge. Unless I have adequate equity, to refinance my mortgage could take a big bite out of the equity. This is especially true today with today’s market conditions. I must analyze all the numbers thoroughly before making the decision. The payment could be lower, but if values drop, I might find myself “upside down” with few options if I need to sell.

What’s more, lenders have tightened their lending practices since the mortgage crisis. This means that in order to refinance my mortgage, I should have good credit, reasonable equity in my home, and a steady income. One way I did this was to check my credit report from all three credit bureaus. I scanned it carefully to check for errors or negative marks and rectified it before talking to a mortgage counselor. This helped refinance my mortgage, and can help you too! Lenders look at your credit report to help determine eligibility for a loan and the better your credit, the better your refinance!

Also, I had to be very careful about choosing a lender. My financial counselor warned me about several lenders who will charge exorbitant closing costs just to refinance my mortgage. So if you are looking for a lender, always make sure the lender is a reputable company. Most local mortgage lenders who have been around for years are usually reputable. Lenders that are new to the area may be fine but require a little bit of checking out. Online lenders can also be legitimate, but are harder to check out. Above all, the best advice anyone could give a home owner wanting to refinance is to look for ways to save money. Low interest rates mean savings for the long term, and if you plan on staying in your home for a long time like me, this could mean savings of thousands of dollars in the future!