Everything You Need to Know about Mortgage RefinancingInk Well Mag July 15, 2016 0 COMMENTS
Interest in mortgage refinancing has drastically increased in the past few months. This is because of the dropping interest rates recently. If your fixed-rate mortgage is 4.5% or above, experts say you should already consider a refinance because it would yield benefits. Before making a decision, here are some things you should know about mortgage refinancing.
No Restart Required
Most banks and lenders allow their clients flexibility to pay off their loan without restarting the loan altogether. An expert from Altius Mortgage Group explains that if you already paid for 3 years, for example, you can just continue for 27 more with your new mortgage refinance rate in Utah. If your lender doesn’t, you can simply pay additional every month. However, that’s not advantageous. Talk to your loan officer to assess your amortization table and know how much you need to add every month to level the field.
Finding the Best Refinance Options
Refinance rates, fees, and programs are constantly changing. That’s why you need to find the right timing and the right lender. Start by asking your friends, family, and co-workers for any recommendations. Try consulting with a mortgage broker, a mortgage banker, a credit union, or a bank. The more choices you have, the better deals you can get. If one lead declines you, you’ll still have other sources which may have better rules and qualifications to accommodate you.
Be Aware of Risks
The main risk of getting a refinance is that you may get penalties from paying down your current mortgage using your home equity credit. To prevent this from happening, make sure your new terms cover that penalty. You should also be aware of extra fees that may come, including bank fees. To avoid this, you can just wait for lower fees or shop around before making a final choice.
Keep these things in mind to be more careful about your plan to get a mortgage refinancing option. Weigh the pros and cons to know if it can actually benefit you.