As a general rule, most people claim the best time to refinance is when rates have dropped 2% or more since you closed your first mortgage. However, refinancing may still be worth the trouble for as low as 1.5% or 1% difference. Whether or not going through the loan process is advisable for less than a 2% drop depends on your existing loans. If you have an adjustable rate mortgage and are worried about how the rates will move in the future, the added security of a fixed rate alone may make refinancing worthwhile.
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Also, homeowners purchasing a vehicle may wish to use cash-out refinancing. Home loans generally come at a much lower rate than the ones found when financing a car. If you refinance and close a loan that repays the first mortgage as well as the price of a car, you have not only rolled two payments into one significantly lower monthly payment, but bought the car at a much lower interest rate. This process will have saved your household money both monthly and in the long run.
Refinancing home mortgages does not have to be an intimidating process. Experience with closing a loan will help homeowners refinance their home mortgage into the kind of mortgage that is most appropriate for their home and income. Apply online to contact up to four lenders about refinancing your home mortgage today.
Home owners refinance their loans for a variety of reasons. Perhaps you want
These are all excellent reasons to refinance. With low current interest rates, now could be the perfect time to refinance your home mortgage.
- Take advantage of low interest rates
- Switch an adjustable rate mortgage (ARM) to fixed rate
- Set a lower rate ceiling
- Borrow extra money to fund a large purchase