Is This a Good Time to Refinance?
By Sandy Flores
Instructor in real estate in the Santa Ana College
We are experiencing a rapidly changing market real estate. But while we are appreciating that current interest rates are at one of their lowest levels in recent years.
The higher payments are not the only reason to change a variable rate mortgage to another fixed rate mortgage, but it is usually the main reason. Especially if we consider that the interests that are currently offering are definitely lower than the interest you have in your home loan.
Many homeowners took advantage of low-interest at three and four years and saved a lot of money.
But now advise these homeowners have a studio again to consider refinancing to a fixed interest rate, and lower, as there is currently so they can be a more affordable monthly payment your budget.
The important thing is to take an individual decision based on your personal financial situation.
Here are some points to consider:
If your first mortgage has a fixed rate, it is easy to compare with the current rates and relatively see if indeed you are going to experience considerable savings or not.
If the current rates are lower than the rate you currently have, you might consider a refinance, but not before considering the own costs of refinancing.
If you will not stay in the property long enough to experience the monthly savings refinancing costs including time, then it makes sense to refinance.
If you desperately need lower payments, refinancing may be a good choice even if you plan to move in a short time of ownership.
If you have a variable rate mortgage and you are experiencing the rise in its budget that economic limits of level you can afford, it is probably time to consider refinancing and compare different estimates of financial companies that offer these services.
It is easy to calculate what a new loan added to their monthly fee, but it is more difficult to determine how much you need to stay home to be sure that refinancing has paid all the costs of refinancing among other considerations.
Note that the numbers vary if you:
Taking money from refinancing your equity, for example, to pay bills, make home improvements, college education, a business venture, among other causes.
Consolidating your first and second mortgage. Get eliminate the second mortgage, which is usually at a higher interest rate and very often a line of credit with a variable interest rate.
Refinance line of credit only to avoid losing interest in you already have on your first mortgage.
Depending on the terms of the second mortgage, and bank loan programs, you can refinance your second mortgage with only minimal cost of fees, converting to a fixed interest rate and probably below the variable that you have now.
The essence of refinancing is to find the best fit for you and financial balance and your family.
Do not refinance, please consult with a financial professional and, even better, get second opinions to make a comparison which is the best deal that suits you. Also, remember that you have the right to receive a “Good Faith Estimate” that allows him to know in detail all costs and expenditure of this process.