While refinancing is a great way to improve your current financial situation, it is not for everybody. Before you attempt to refinance your mortgage, you have to evaluate every aspect of your current financial situation. This includes your credit score, savings, fees, rates, interest charges, and potential closing costs, and mortgage insurance for a new loan.
Since refinancing can be a great option under the right circumstances, let’s look at some signs that you’re in a great position to refinance now.
5 Signs You Can Refinance Your Mortgage Now!
Here are five signs that indicate that you are ready to apply for a refinance loan:
1. Your interest rate is considerably high than what’s available on the current market.
Fluctuating mortgage rates are typical. As time goes on, mortgage rates rise and fall frequently based on the current state of the economy and the real estate market. For example, if you purchased your property during the peak of the housing boom, then there’s a possibility that you are paying at least two percent higher than the average mortgage holder today. Talk to your financial advisor about your current rates. If they are substantially higher than what’s offered today, refinancing is the way to go.
2. Your house has increased in value.
If your house has increased in value thanks to a surge in the real estate market, it may be time to refinance. Many homeowners don’t realize that an increase in their property value can get them lower financing rates on their mortgage. Compare your current home value to the value of your house when you initially applied for your existing mortgage. Then talk to your financial advisor to see how refinancing can cut your costs.
3. You need to get out of debt.
Many people use refinancing to get out of significant debts, especially if they have equity in their homes. The money received at closing can be applied to high-interest credit card debt, medical charges, and student loans. Before you choose this option, do your research to make sure you’re making a good financial move for your future.
4. You need cash.
While this isn’t always the best idea, many people choose to refinance when they need a cash advance. This is particularly common when individuals have a significant amount of equity in their homes. While you may think this is a simple process, specific laws and requirements must be followed. Discuss this with your lender and financial advisor before refinancing for this reason.
5. Adjustable-rate mortgage rates continue to climb.
This is one of the most common reasons why homeowners refinance. If you were initially locked into an adjustable-rate mortgage, refinancing might be the right option for your financial status. When interest rates begin to surge upwards, homeowners in an ARM can end up paying a significant amount of money in extra interest fees. Refinancing to a fixed-rate mortgage can help you lock in a lower rate and save money in the long run.
Contact All American Financial Services for Your Refinancing Needs
If you’re considering refinancing your mortgage, All American Financial Services is here to help. Contact us today to discuss your options with a reliable refinance in Lancaster.