Consider These Tips Before You Refinance Your Mortgage, Phoenix

January 29, 2020

Consider These Tips Before You Refinance Your Mortgage, Phoenix

By Published On: January 29th, 2020Categories: Phoenix AZ, Refinance, Refinance Mortgage

Are you planning to refinance your mortgage, Phoenix? If you do, the following tips may be able to help increase your chances of attaining this goal.

As mortgage brokers who have been in the industry for decades, we have proven that preparation is so important for you to succeed in refinancing your mortgage. Here are some tips that your future self will thank you for:

The need to be ready when interest rates drop

Being ready to refinance your mortgage, Phoenix, AZ, isn’t just about catching your target low rates before they go up. It also means avoiding a backup in refinance applications. Meaning to say, you have to be in the pipeline ready (this includes having your documents ready) to go when the interest rates starting to go down; else, you have to get in the back of the line – a scenario that oftentimes can have you missing the dip in rates.

On why your credit score should be in good shape

Even if you act fast enough to catch your target interest rates, the effort may just be wasted if your credit score is not that good. Note that rates are a key factor that affects your monthly payment. Just because you find low rates does not mean you qualify for them. But here’s the good news: You can improve your credit score (some, in fact, experience improvements in just three months) by doing the following:

  • Checking your credit report for errors
  • Using your credit card at safe distance to your credit limit (do not max out)
  • Paying bills on time

On how refinancing for a shorter term can save you money

There are two ways you can save money when refinancing into a shorter-term fixed-rate loan: (1) The interest rate is lower than a 30-year fixed-rate loan; and (2) you will be paying less interest.

Here’s a good example provided by MarketWatch:

30-year fixed-rate: USD 300,000 mortgage taken out in 2010 at 4.75% fixed interest rate

15-year refinance: at 3.50% fixed interest rate

Savings: USD 52,975

An important thing to highlight: Although the original monthly payment of USD 1,565 would take on an extra USD 311 each month, you would save more money in the long run and build equity faster.

If you have more questions about refinancing your mortgage, Phoenix, do not hesitate to contact us here at HomePlus.

Call us today at 800-810-PLUS (7587).