Should You Refinance Your Mortgage?

-

 brought to you by

Hope Leitner
Berkshire Hathaway HomeServices California Properties

Should You Refinance Your Mortgage?

Sometimes people take out a mortgage and are forced to accept less-than-favorable terms because of a low credit score or a high debt-to-income ratio. In other cases, homebuyers choose a mortgage that has a fixed rate for a specific number of years and then convert to an adjustable rate. That can save money in the short term, but when the interest rate is recalculated, monthly payments can skyrocket, causing homeowners to struggle to meet their obligations.

If you’ve been having trouble covering your monthly mortgage payments, refinancing the loan could be the solution. Refinancing could allow you to lock in a lower interest rate and significantly reduce your monthly payments.

Lower Costs
If your interest rate is higher than you’d like, refinancing your mortgage might lower it. A decrease of one or two percentage points could shave hundreds of dollars off your monthly payment. You can even use that extra money for credit card bills, home repairs, a new car, or savings for retirement or your children’s education.

Access to Equity
If you need cash to cover an unanticipated expense or to pay off high-interest credit cards, tapping into your home’s equity is an option. You could refinance your home for more than the amount of principal you currently owe and use the extra money for other needs. While this could help you out if you’re strapped for cash, be aware that it would increase the size of the mortgage and might raise your monthly payments if your interest rate stays the same. If you are unable to cover your new monthly payments, your house could wind up in foreclosure.

Refinancing Process
If you want to refinance your mortgage, you’ll need to fill out paperwork and go through an approval process. The fact that you currently have a mortgage is no guarantee that you’ll be approved for refinancing. If your income has gone down, you have accumulated a lot of debt, or your credit score does not meet the lender’s guidelines, your application could be denied, or you might not get the low interest rate you want.

If you decide to refinance, be prepared to pay for an appraisal, application fee, loan origination fee, closing costs and other expenses. In some cases, the lender will roll these fees into the loan balance, but other companies require refinancers to pay these costs out of pocket at the time of closing.

Explore Refinancing Options
If you’ve been struggling to pay your mortgage, you might be able to ease the burden by refinancing. This could allow you to reduce your interest rate and lower your monthly payments significantly, which would relieve stress and give you more money each month to devote to other priorities. Talk to your lender about your options.



Comments

Post a Comment

Popular posts from this blog

Talking Real Estate with Hope Leitner, January 2023

-
Image
  2023 is already making headlines for the Real Estate Market. Don't let the bad news scare you. There really is no crash in sight according to the professionals. San Diego is even less likely to experience a steep downturn. There's just too much demand for what comes on the market here. The gains in 2020, 2021 & 2022 were so extreme, any decline at all just indicates a stabilizing market.   Rising interest rates may mean that some buyers will look into risky loans, this article below will arm you with the knowledge necessary to avoid a mortgage pitfall.    I love hearing from everyone on this email list. I am here to support you whatever your real estate needs might be.     January - Ponder this -  “We are born in ignorance, we die in ignorance, but maybe sometimes we learn something important and pass it along to others before we die. Or we write it down in a little book.” - Greg Bear - Reading is what helps us overcome our ignorance, our fears, our self-made walls. Janua
Read more

San Diego Market Update May 2024

-
Image
The market is heating up in time for the traditional summer rush. I wish I could say when the market will cool off or at least level off, But, I can't. All I can say is the economy is steady and the real estate market reflects that.    Below you'll find the housing report for the current month along with data from the preceding months. San Diego County continues to grapple with an inventory shortage. The average cost of a home has risen, but that doesn't mean there aren't still some affordable properties out there.    Whether you're contemplating a purchase or sale, I invite you to reach out. Let's discuss your options within the dynamics of our distinctive housing market, ensuring your decisions align with the current trends and realities.   If you know anyone who might be interested in receiving this market update every month, please have them sign up at this  link.   I am always here for my clients and their friends and family.   Your Forever Agent,   Hope Le
Read more

Curious about the Real Estate Commision Ruling?

-
Image
    Are you aware of the settlement reached by the National Association of Realtors (NAR) in a class action lawsuit last week?   This settlement could potentially have significant implications for the real estate market, particularly in regions with high property prices, like ours.   The lawsuit alleged that NAR's rules and practices regarding the sharing of commission between buyers' and sellers' agents stifled competition and inflated housing costs. As part of the settlement, NAR agreed to make changes to its rules and practices, including allowing greater transparency in commission rates and providing more information to consumers.   In high-priced regions like ours, where housing costs are already a concern for many buyers and sellers, any changes resulting from this settlement could have notable effects. Greater transparency in commission rates might lead to increased competition among real estate agents and potentially lower costs for consumers. However, it's esse
Read more