Want to make sure that you get the best rate when you refinance? The only way to guarantee you are getting the best refinance rate is to compare lender rates. When you fill out a mortgage quote form, you will get mortgage rate offers from at least 4 different lenders.
Understanding Refinance Mortgages
A refinance mortgage is not an extension of an existing mortgage loan; it is a brand new one with a new interest rate and new payment plan. Common reasons why people refinance is to lower their current interest rate, pull some cash out of their home, or change their loan type. Another reason you might want to refinance is to go from an adjustable (ARM) to a fixed rate mortgage.
Refinancing for a New Rate
Refinancing to get a new rate can be beneficial if you currently have a higher than market rate interest rate. The general rule of thumb is if current rates are at least 2% lower than your current rate you should probably refinance. If you want to figure out exactly how much you will save by refinancing, use ourrefinancing mortgage calculator. However, refinancing does come with costs. There are appraisal fees, legal fees, processing fees, and administrative fees that all add up. It is important to make sure that the money one would save by refinancing is greater than the amount of money they would spend to do it. There are some companies that will wave such fees, but they will compensate for it by creating a higher interest. You can refinance into almost any type of loan, including Fixed Rate, or Adjustable Rate Mortgages.
Other Reasons to Refinance refinance
Other reasons you might want to refinance is because you need to pull some money out of your home. By refinancing your mortgage and pull the money out that way (commonly called a cash out refi), all your interest is still tax deductible and you may lower your monthly payment, but extend the term (years) will still have to pay back your loan. The other most common reason to refinance is to change your loan type.
If you currently have an Interest Only, or Adjustable Rate mortgage that is about to start going up, you should refinance to a fixed rate mortgage. This will ensure that your interest rate will stay the same and not fluctuate.
How can I get a refinance mortgage
You can refinance with us. Click here for more information.
Q: Should I refinance?
A: It depends on your situation. As stated above, the general rule that you can follow when you are number crunching is this: if the difference in the interest rates will be two percentage points or more, it is most likely worth it to refinance. Even considering fees you may have to pay, two percentage points will still save you money if you plan on staying in that house for a substantial amount of time.
Q: Does it make sense to refinance again even if I have already refinanced once before?
A: Yes, if the interest rates are falling steadily, it may be worth it to refinance a second, or even third time. You may even be eligible for a tax deduction on additional refinance mortgages.
Q. How can my FICO / Credit Score effect my mortgage rate.
A: Your FICO & credit score have a huge impact on what your refinance mortgage rate will be. Good credit scores or A-Paper is around 720-850. Many lenders won’t touch borrowers with scores below 660 but, the cutoff between A-paper and Sub-Prime or Non-Prime lending is a score of 620.
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