In this day and age, it seems like more and more homeowners are considering refinancing their mortgage. With the low rates out there today refinancing might be a good idea. Refinancing can put you in a better financial position and can even put a little money in your pocket. However, there are a few things you may need to do before taking this step. Let’s take a look at a few things you should consider before going through with this process for Home Loans.
When you refinance your home you’re basically going through the same process you went through the first time you signed up for your mortgage. During the first time around, your credit score was very important and this time is no different. It’s a fact that borrowers who have good credit have a better chance of getting better mortgage rates. If you already have a mortgage, but you have a low credit score, you may want to consider building your credit before refinancing.
If you have an adjustable mortgage rate, you may want to consider switching to a fixed mortgage rate. An adjustable mortgage rate means that your interest rates will constantly fluctuate. This could work out great for you if your rates fell, but rates often rise much higher that homeowners expect. Switching over to a fixed-rate loan will ensure that your rates stay steady year after year. Most people avoid fixed-rate Home Loans because the interest is usually higher, but it could benefit you in the long run.
Homeowners also tend to save money by agreeing to long-term mortgages. Long-term mortgages last for about 30 years and tend to come with lower interests rates. If you choose to refinance, you should consider agreeing to a much shorter mortgage term. A shorter Village Mortgage term typically lasts between 10 and 15 years. Since the term of your loan is shorter you’re typically expected to pay a higher interest rate. In this case, a higher interest is great if you can afford it.
These are just a few tips you can use if you’re considering refinancing your home loan. Again, consider improving your credit before approaching your lender. You should also consider switching over to a fixed-rate mortgage to save money or switching over to a short-term loan if you don’t already have one.
©2014 Village Mortgage Company, NMLS #6331, CT #6331, RI #6331, Mortgage licensed lender in MA ML6331. This is not an offer to extend credit to any individual who may be entitled to a more complete disclosure per RESPA, TILA, HOEPA or any other more applicable federal, state or local law or regulation. Rates, terms, fees, products, programs and equity requirements are subject to change without notice. Village Mortgage, Equal Housing Lender.
