Is it time to refinance?

Many homeowners have refinanced over the last few years as interest rates have been at their lowest in many years. There are some people that couldn't refinance for many reasons – credit, home value, etc.  For those people, now might be the time to refinance.  Home values have increased over the last year or two and so now many have more equity in their home compared to a 3-5 years ago.

If you are wondering if you should refinance, consider these things:

    -Can you get a lower rate than you currently have?  Rates have actually dropped over the last month or so, they are about as low as they have been since last October.  If you can get a rate that is at least 1-2 points lower than your current rate, it may be worth looking at refinancing.  Compare the costs to the amount you will be saving and decide if it makes sense.

    -You want to change the term of your mortgage.  Maybe you have a 30 yr mortgage and you want to go to a 15 yr now.  Maybe you have an adjustable rate mortgage and you want the security of a fixed rate mortgage.  These are reasons to consider refinancing.  If you started with a 30 yr mortgage and now your financial situation is better, you may be able to afford a 15 yr mortgage.  Talk to your lender and decide what makes sense for you.

    -You have a better credit score.  Maybe you can go from an FHA mortgage to a conventional mortgage and eliminate mortgage insurance.  Or maybe your score has improved enough that you can get a better interest rate.  These are things to look into and decide if it makes sense for you to refinance.

    -You have more equity in  your home.  Maybe you have a second mortgage or mortgage insurance.  If you have gained enough equity with home values increasing, you may be able to combine your first and second mortgage into one to save you money.  Maybe you have enough equity to eliminate the mortgage insurance but you haven't had the mortgage long enough to eliminate it through your lender.

All of these are reasons to talk to your lender about refinancing.  It may make sense to do something now as rates have been slowly dropping.  Right now interest rates are at about their lowest since October of 2013.  As always, rates will change daily, sometimes more than once a day, but it could be the right time for you to save some money on your mortgage!

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage & Equity Consultants, NMLS#150953 – EmailWebsite

Written By

Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

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