Thinking about refinancing your home may make you nervous, especially if you’re not familiar with the refinancing process. First, let’s outline what refinancing entails. When you refinance your mortgage, your existing loan is paid off and replaced with a new one, often with a better rate.
You’ll want to ask yourself questions as you prepare to refinance your home. Is it time to refinance? When is the best time to obtain a new mortgage? Read on to find out.
If you bought your home with a bad credit score or weak credit history, you likely have a loan with a higher interest rate than average. Refinancing is a great way to lower your interest rate if your credit has improved because you’ll be eligible for better interest rates than you were the first time you applied for a mortgage.
A change in interest rate could also mean a shortened mortgage term. If you’re being charged less interest, you’ll be able to pay your loan off at a quicker pace, which puts you on a path to being debt-free.
This is one of the riskier reasons to refinance your home, but it’s an option that makes sense for some homeowners. Refinancing allows you to access to your home’s equity, which means you could technically use it as a chance to get money for large expenses. It’s ideal to talk to a financial advisor before making any decisions about refinancing.
At Choice Mortgage Bank, Inc., our team is ready to help you figure out whether it’s the right time to refinance your home. We work with each client on a one-on-one basis to determine the best solution. Reach out to us at 561-362-8204.