Over the life of your mortgage, you may want to refinance to meet a variety of personal and financial goals. Furthermore, it’s important to ask these basic questions before making the decision to refinance your mortgage. Make sure to ask these questions below when discussing refinancing options with your lender.
Why Do You Want to Refinance?
Determine what your goals are and why you want to refinance. According to Forbes, while interest rates are at historic lows, the savings (not the rate) a refinance offers should drive a homeowner’s decision.
Lower your mortgage payment by securing a lower interest rate which could help save you money on your mortgage payment.*
Consolidate your debt by saying “goodbye” to higher-interest rate debt with a cash-out refinance.
Cash-out on equity with a cash-out refinance which can provide extra funds needed for home improvements, vacations, etc.
Keep payments from rising by locking in an interest rate, especially if you plan on staying in your home long term.
What Types of Loans Do You Offer?
When refinancing, you’ll completely replace your current mortgage with a new loan that meets your goals. Which is why it is important to know the different types of loans available. To find a loan that is right for you, contact our team today!
Conventional Loan: A home loan that falls under the county conforming loan limit. Typically viewed as the 20% down mortgage solution, conventional loans come in all shapes and sizes.
FHA Loan: Low down payment home purchase solution. Governed by the Housing of Urban Development (HUB), an FHA loan offers flexible guidelines for borrowers with limited down payment funds, and an imperfect credit history.
VA Loan: Loan option for military veterans or active service members. As a qualified veteran, active-duty member, or eligible spouse, you have earned VA housing benefits that include: no down payment, no monthly mortgage insurance.
USDA Loan: A mortgage solution for your rural homeownership dreams. USDA loans are government insured for purchasing within a designated rural area. Designed for low-to-moderate income borrowers, a USDA loan offers flexible guidelines and no down payment.
Jumbo Loan: A home loan that exceeds the county conforming loan limit. In most housing markets, a jumbo loan can purchase a home worth more than the conforming loan limit set by Fannie Mae and Freddie Mac for a single-family home. In high- cost counties, the counties set the loan limit.
Is My Credit High Enough?
To get approved for a refinance, consider some ways to improve or maintain your credit score. If your score is not where you want it to be, consider the credit tips in our blog, How to Increase Your Credit Score.
What Documents Do I Need for a Refinance?
Similarly to your original mortgage, the documents needed to refinance your existing mortgage are the same, overall. Gather your documents ahead of time to speed up the application process. Check out our blog, Documents Needed for Mortgage Pre-Approval” to learn more!
If you’re considering a mortgage refinance, ask yourself these important questions to help you determine if refinancing is the right option for you! Contact one of our Loan Officers to discuss your options today.
*By refinancing your existing loan, total finance charges may be higher over the life of your loan.
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