When making decisions about properties, it is usually a tough one. For one thing, it involves some serious amount of money; for another, the decision you make can affect your life in the long run.
Before you even consider to refinance your mortgage, Fullerton, CA, make sure you put every factor into consideration. Here are 4 questions to ask before deciding to refinance your mortgage.
How much equity do I have in my home?
Why do you need to consider the equity in your home? Because it can affect interest rates. Most traditional mortgages require insurance when the loan-to-value (LTV) is greater than 80%. You can qualify for lower rates when it is less than 80%. The lower the LTV, the lower the risk the loan is.
If you do not already own 20% or higher of your home’s total equity, you may want to reconsider refinance mortgage, Fullerton, CA, as you may face more hurdles in the process, including paying for private mortgage insurance.
Do I have a healthy credit score?
You get a more favorable refinancing when you have a better credit score. Note that your lender will investigate your credit history. One course of action you can take is to pay down – or pay off – small revolving debt before running your credit application. This helps in boosting your FICO.
Aim to get a credit score of 760 or higher to have better chances of getting the best interest rates.
How much will it cost to refinance?
Mortgage refinance isn’t free. In all likelihood, you could spend about 3% of your principal or the total amount of money you borrowed. In addition to that, you are going to spend on any third party costs – title insurance, settlement fees, appraisals, and taxes.
Your mortgage broker or advisor should be able to provide you more insights about the associated costs. So, figure out the numbers and decide based on what the number is telling you.
How long do I intend to stay in the home?
It does not make sense to go for mortgage refinancing if you are not staying in the home for some years. Refinancing benefits you in the long run. If you are planning to move out before reaping the benefits of refinancing, then you might want to reconsider this mortgage option.
Do you have more questions about refinance mortgage, Fullerton, CA? Don’t hesitate to contact us here at HomePlus Mortgage.
Call us today at 800-810-PLUS (7587).