What's
the Best Time to Refinance My Mortgage?
Refinancing your mortgage could save you a significant
amount of money, shorten the time until your loan is paid off, or increase your
cash flow. This is especially true if you bought your home during a time when
rates were remarkably high or have an changeable rate mortgage (ARM).
However, timing is vital when you’re asking
yourself, “Should I refinance my mortgage?” Refinancing comes with a new set of
closing costs, and sometimes the practical thing is to continue paying on your
existing loan. Other times, you might need cash for a major purchase, and retrieving
your home equity can make decent financial sense.
In the end, you need to decide what your goal is
before deciding on a solution. Learn more about finding the best time to
refinance your home.
What Are The Risks?
One of the major risks of refinancing your home comes from possible drawbacks
you may experience as a result of paying down your remaining mortgage with your
line of home equity credit. In most mortgage arrangements there is a establishment
that allows the mortgage company to charge you a fee for doing this, and these
fees can amount to thousands of dollars. Before deciding the agreement for
refinancing, make sure it covers the penalty and is still worthwhile.
Along these same lines, there are extra fees to be aware of before
refinancing. These costs include paying for an attorney to guarantee you are
getting the most valuable deal possible and handle paperwork you might not feel
at ease filling out, and bank fees. To offset or avoid entirely these bank
fees, it is best to shop around or wait for low fee or free refinancing.
Compared to the amount of money you may be getting from your new line of
credit, but saving thousands of dollars in the long run is always worth
considering.
Unsure If You Should Refinance?
Run the calculator to see if refinancing makes logic for you. Our mortgagerefinance calculator shows how much you can save locking in lower rates.
