You bought your dream home. You painted the walls the perfect eggshell cream and you added a fence to the yard for the puppy you added to the family. It’s your sanctuary, and after months, years, or even decades of paying on your original mortgage loan, you’re wondering if refinancing is the right choice for you. But where to start?
The best place to start when considering refinancing is with some basic questions you have probably asked yourself before like,
- How long will I stay in my home?
- What is my current interest rate and what could my new interest rate be?
- What is my current monthly payment and what will my new monthly payment be?
- Will I use additional cash, including the refinanced loan, for things like paying off credit cards?
These important questions will help you determine if you’ll benefit from refinancing. For example, if you don’t think you’ll be staying in your home for very long it might not make sense to refinance. It can take several years to recoup the money you spend on closing costs with the benefit of the lower rate. Working with Amplify’s professional bankers will help you make the right decision to maximize those benefits. If the reasons to refinance make sense, applying to refinance your mortgage is easy. Read on for Amplify Credit Union’s Top 5 Reasons to Refinance Today.
- You qualify for a better interest rate. You’ve been working hard on improving your credit score, and you’re ready to see that higher score work for you. Refinancing on an improved credit score or credit history may reduce your rate.
- Rates or circumstances have changed. If rates have dropped since your original finance rate, refinancing may significantly decrease the amount of money you pay over the course of your loan. A good rule of thumb is at least a 1% rate improvement is worth the refinancing expense, but calculate the savings for yourself.
- You’re putting a lump sum toward your principal balance. If you come into some money and are able to put a large lump sum toward the balance of the principal on your loan, refinancing could lower your monthly payment or allow you to lower the term on your loan.
- You’ve acquired 20% equity in your home. If your original mortgage agreement included Primary Mortgage Insurance (PMI), and you now have at least 20% equity, you may be able to refinance without PMI.
- When you don’t need a Home Equity Loan (HEL) or a Home Equity Line of Credit (HELOC). If you need cash for college expenses, remodeling, medical expenses or any number of reasons, these loan options may be more suitable over refinancing your home. Realize that if you take cash out on your refinance, you will not be eligible for a HEL or HELOC down the road without refinancing the entire mortgage. That’s why it’s so important to do your homework and understand your choices when it comes to loans and using your home’s equity.
Understanding the reasons why refinancing is right for you is very important, and our team at Amplify will answer any questions and discuss your options in detail. We can also find the best rates and payment plans available to you.
Once you’ve made the decision to refinance and picked the loan that works best for you, we will review and underwrite your current mortgage. Once you’re approved for the new mortgage, you’ll be required to attend the closing and the new mortgage will replace the original loan.
Talk to an Amplify Credit Union refinancing specialist today about what course of action is best for you.