When done correctly, refinancing your mortgage can save you thousands of dollars in interest over the life of your loan. Are interest rates significantly lower than when you got your mortgage? Then it may be time for you to consider refinancing your mortgage.
Take a moment to review the steps of refinancing your mortgage below.
Determine your goal
More often than not, our clients want to refinance to lower their monthly payment. Once you’ve determined your goal, we can look into the pros and cons of your refinance, and present you with several different options.
In some cases, it may be in your best interest to extend the term of your loan, as it will greatly reduce the monthly payments. Generally, extending the term of the loan is best for those planning on staying in that home for the life of the loan.
For others, it’s a good idea to keep the loan’s term the same and simply save on your monthly payment with a lower interest rate.
Check your credit
As with obtaining a mortgage, your credit score is extremely important when you’re refinancing. It can ultimately make or break your ability to obtain a lower interest rate. The good news is that if your credit score isn’t where you want it to be, we can work with you to increase it before committing to a refinance.
Know all of the costs
Your lender will provide you with a Loan Estimate which lays out all of the refinancing costs. Refinances aren’t always the cheapest option in the beginning, but once you hit your break-even point (when your savings from a lower interest rate surpass the amount it cost to refinance) you will begin to reap the benefits.
Gather the necessary paperwork
As with when you first obtained your mortgage, you will need to collect the proper paperwork before your loan can be refinanced.
Remember, while refinancing adds a little extra work to your plate for a few days, it can save you money, lower your monthly payment, or even allow you to withdraw cash.
Here at Mortgage Specialists, we want to ensure that refinancing your mortgage is in your best interest. If you’re considering refinancing your mortgage, please give us a call at (402) 991-5153 whenever is most convenient for you. We will work around your schedule to make sure your refinance goes as smoothly as possible.