Refinancing a mortgage can be a viable tool to improve your financial situation. It can help save you money or make paying your monthly bills easier. But the fact remains that mortgage refinancing is not for everyone. So before you sign on the dotted line, it is imperative to ask these key questions to decide if going for a refinance makes sense, given your situation.
Q1: What are my goals?
Many people go for a home refi, Riverside, CA, because of the low interest rates offered, but there are other reasons apart from that. Do you want to lower your monthly bills? Do you want to shorten the term of your loan by refinancing to a 15-year mortgage from 30? Do you currently pay for an adjustable-rate mortgage? Make sure you know and understand your goal. It gives you an idea of whether or not refinancing is the way to go.
Q2: Is refinancing worth it?
Will you gain when you go for a home refi, Riverside, CA? You must figure out the numbers and do what the numbers are telling you. Please note, you can expect that the closing costs could run between 2% and 4% of the total loan value. These include the payments for appraisal, underwriting, and title. So, let us assume that the closing cost is USD 3,000, and you can save USD 200 a month by refinancing. Therefore, it is going to take 15 months to break even.
Q3: Can I afford the closing costs, given my financial situation?
While you might see enticing lines such as “low cost” or “no-cost refinancing,” make no mistake as you pay for refinancing. Most financial advisors recommend paying the closing costs upfront. While a “no-cost” refinance does not charge closing costs, they come with an interest rate that could be as much as half a percentage point higher. So, if you cannot afford to pay the closing costs upfront, you might want to defer your application until you can. (A mortgage professional can help you choose the right course of action, so do not hesitate to ask for help.)
Online looking for a reputable broker to help you on a home refi, Riverside, CA? Contact HomePlus today at 800-810-PLUS (7587).