Questions to Ask Before Refinancing Your Mortgage in 2020
The clarity in thoughts is essential when you are making a financial decision.
In this article, we will answer some of the most revealing questions that will help you decide whether you should refinance your existing mortgage.
So, let’s dive right in!
Here are the questions you need to get answers to before you refinance your mortgage.
Why do you want to refinance your mortgage in 2020?
There might be two thought processes behind this decision –
– The interest rates are lower at present than your current mortgage interest rate.
– You are looking to lower the monthly payment on your mortgage.
– You are looking to lock in a lower rate of interest.
Make sure you have enough information about the current market and interest rates.
1. What are the terms of my current loan ?
Borrowers with adjustable-rate mortgages or interest-only loans should consider the potential benefit of switching to a fixed-rate loan.
2. How long do I plan to stay in this home?
Generally, to expect a home refinance to cost 3 percent to 6 percent of the loan amount. A simple calculation shows how long it will take to reach the break-even point when the savings outweigh the costs.
3. Do I qualify to refinance my mortgage?
Refinancing a mortgage loan will depend on your credit score, Life-Time Value, and debt-to-income ratio.
4. What types of closing costs can I expect
There are two ways the expenses of refinancing can meet. One, you can pay the costs upfront. And two, you can add them up to your existing debt.
5. What are the worst-case scenarios?
Refinancing has its downsides. It all comes down to what you are looking to do with the money. If you want to remodel the house, you will increase the value of the asset.
Take your time and understand the situation you are now and where you will be if you decide to refinance your home loan. We highly recommend you to consult our Loan Officers to get more insights into refinancing your mortgage.
This Mortgage Calculator will help you determine the monthly payments of your loan. Simply enter the loan amount, term and interest rate in the fields below and click calculate.
Have questions? Feel free to put them down in the comments section. We’d love to hear from you!
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