Practically everyone has refinanced or thought about it at one point in time. We’ve seen the dozens of commercials that urge us to do it. With rates at record lows over the past few years, refinancing has helped many borrowers lower their monthly payments.
Refinancing your mortgage can be a very hard and confusing experience. When you’re making your decision, there are several things to keep in mind:
First, even a small rate cut can pay off quickly.
Second, if you are planning to stay in your home for at least three to five years, it may make sense to pay “points” (a point equals 1% of the loan amount) and closing costs to get the lowest available rate.
And third, you can avoid a cash layout and still get a low rate by adding the fees and closing costs to your new mortgage. This does not mean shouldering a lot of extra debt. If you’ve had your current mortgage for at least three years, you’ve probably reduced your balance by several thousand dollars. So you may be able to tack your closing costs onto your new loan, lock in at a lower rate and still end up with a mortgage amount that’s less than your original one. More importantly, a lower monthly payment.
Another factor to consider is how long you expect to stay in your home? If your planning to move in the next few years, the monthly savings may never add up to the costs that are involved in refinancing.
We have a program for homeowners that you will be able to refinance up to 105% of your home value if your loan is insured by Fannnie Mae or Freddie Mac. It is called DU Refi Plus or Refi Plus.
Give us a call or fill out the quick application if you think your home value may be an issue for you to refinance. Or if you do not know who it is insured by, we can help.