When Should I Refinance My Mortgage? You are not alone in wanting to know when you should refinance your mortgage. Thousands of homeowners every year wonder when does it make sense for them to refinance their mortgage. Refinancing an existing mortgage can certainly be a very advantageous money-saver, but determining when to refinance often depends on a few different conditions, including: the current interest rates, the amount of equity in your home and your overall credit rating. Here are some tips to help determine when is the right time to consider refinancing.

 

Do you currently pay more than your house is worth? Many homeowners find that they have been paying more than the market value for many years. If this sounds familiar, it may be time to refinance your mortgage. If you are not going to be able to get much more money down, then you might want to think about refinancing for better rates. If you have enough equity in your home, you could even use the equity to secure a low interest rate.

 

Do you want to lock in the interest rates? Mortgage interest rates are going up all the time. However, if you are committed to keeping your mortgage for a certain period of time, at the end you will be glad you decided to refinance. The reason for this is that you will be able to lock in the low interest rates. If the rates start to rise, you can simply refinance again and get a new, higher interest rate.

When Should I Refinance My Mortgage?

 

Do you need to do major renovations? Major projects like new construction or additions to a home often increase the principal balance. This can lead to significant additional costs. Refinancing might be necessary to lower these costs. Refinancing may also allow you to pay less each month towards your mortgage, as you will only be adding your own funds to the loan.

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Is my mortgage at an appropriate interest level? If your payments are high compared to your income, you are going to be stuck paying high interest. However, if your income is higher than your mortgage payment, you will be saving money. Therefore, you need to take this into consideration when deciding whether or not to refinance your mortgage.

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Will I be able to make my mortgage payments on time every month? This can make a huge difference when it comes to qualifying for a refinanced mortgage. Most lenders require you to have a minimum payment on time every month. If this is not the case with your mortgage, you are going to need to work out a plan for lowering your payments. This will ensure that you get the best deal when you refinance your mortgage.

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How long will it take to repay my mortgage each month? Most people do not realize that the length of your mortgage will make a difference in the interest rates you qualify for. This is because your mortgage will determine how long it takes you to pay your payments off. Therefore, if you want to refinance your mortgage quickly, consider paying off your current mortgage sooner rather than later.

 

How much am I paying on my mortgage already? Remember, you will always be getting a higher mortgage rate than you are currently paying. However, if your mortgage is a little bit behind what you are paying, there are a few things you can do to bring your mortgage up to date. Refinancing is only going to improve your chances when you have all of your facts right and you know when you should refinance my mortgage. The process will be very simple when you understand what it is you are doing.

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