Should you refinance? again?

Mortgage rates seem to be continuing to drop so should you refinance, maybe for the 2nd or 3rd time?  As always, you want to attempt to lower your payment, but there may be other reasons to consider a refinance.

First, look at your interest rate – can you lower it and recoup the costs before you plan to move?  How long do you plan to live in your home?  It may make sense to look at refinancing if you can recoup the costs within a couple years.  

Does it make sense to look at a 15 yr term?  You may be able to lower your rate enough to keep your payment about the same (maybe slighly higher) but pay it off in a much shorter timeframe.

Are you paying mortgage insurance?  Do you have an FHA loan?  You may have enough equity to eliminate mortgage insurance.  Or if you have an FHA loan, you may be able to reduce your mortgage insurance and possibly eliminate your mortgage insurance.  For some people it may make sense to refinance a FHA mortgage to a conventional loan even if you can't eliminate the MI.  With FHA loans now, the MI never goes away, but a conventional loan will allow you to elminate MI when you have enough equity (after a minimum of two years).  It may be worth talking to a loan officer about your options.

Is your mortgage still underwater?  Do you still owe more than the home is worth? You may qualify for a HARP loan and those may go away.  It is definitely worth talking to a loan officer to see if it makes sense to refinance your loan.

Do you have an adjustable rate mortgage? If so, you may want to look at refinancing that mortgage into a fixed rate loan – depending on how much longer you plan to keep your home.

Do you want to take some cash out of you home? Is it worth considering a cash out mortgage?  Maybe you want to do some updates to your home or pay off a 2nd mortgage – talk to your lender and see if it might be worth refinancing to pay for those items.

We never know how long interest rates will stay low, but I think I have said every year for the past five years, that now is the time- rates are going to go up next year and here we are again!!  I never thought we would see rates as low as they are now, but again, who knows how long they will stay here!  Talk to your loan officer about your options!!

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage & Equity Consultants, Inc, An Equal Housing Lender, NMLS#150953 - Email - Website

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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