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When considering refinancing your mortgage, be sure that your decision is based on more than just the lower rate.  Sure, rate plays a part, but you also need to see what the actual savings is vs. the cost of the refinance.

Before you move forward with a refinance, be sure your mortgage professional has thoroughly explained all of the options and has compared all the pros and cons with you.

Here are the most common refinance reasons:

  1. You are currently paying mortgage insurance and you wish to remove it
  2. You have an adjustable rate mortgage and you want a fixed rate mortgage
  3. You have a fixed rate mortgage and wish to change to an adjustable rate mortgage
  4. You have a 10,15,20,or 25 year mortgage and you wish to lower your payments
  5. You have an interest only loan and want a fully amortizing mortgage
  6. You have two mortgages and you wish to combine them into one mortgage
  7. You have a mortgage, but you wish to take out a home equity line of credit
  8. You have a lot of home equity and you wish to take cash out for other investments
  9. You need cash to pay off and consolidate other debts
  10. Your current rate, or payment is too high and you wish to lower it
  11. You wish to add or a remove someone from your current mortgage (Common with divorce, or for removing anyone who may have co-signed)
  1. Your current loan type is not favorable
  2. You have a 30 year mortgage and wish to switch to a shorter term mortgage
  3. You need to renovate/remodel your home and you need a renovation loan (Renovation loan appraisals are based on the after-improved value of the home)
  1. Your current mortgage is based an investment property or second home and the home is now a primary residence.
  2. Your current mortgage was a cash out refinance (they typically have a higher rate) and you want a lower rate
  3. You had less than 25% equity in your condo when you took out your current mortgage and you now have greater than 25% equity.
  4. Your credentials and qualifications have improved since taking out your current mortgage and you can now qualify for a better loan program or cheaper mortgage

There is a lot more to a refinance than most people realize and knowing what is most important and having a real strategy is crucial to making sure that you don’t waste waste money by making rookie mistake.  A lower rate with the wrong mortgage strategy could be costly, so always be sure that you have a plan that makes sense.  Increasing your loan balance by thousands of dollars just for a lower rate could be a major mistake.

We help our clients compare low and no cost refinance options and we compare and analyse the true savings vs. your current mortgage.  In some cases, your current mortgage may still be the best option.

If you would like us to review your mortgage, or if you just have general questions, feel free to contact us at 240-670-5090 or CJMT@mainstreethl.com

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Call us at (240) 670-5090 or email us at CJMT@mainstreethl.com