Planning to buy a new home? There are several loan options available that can help you achieve that goal and one of them is home loan refi, Palm Beach, FL. However, while this can be a promising instrument to save some good amount, there are also several drawbacks of this option that you should pay attention to.
We are sharing in this post some important questions about home loan refi, Palm Beach, FL, which might help you make an informed decision on whether to go for refinancing or not.
Why do I need equity in my home? To qualify for a new loan without paying private mortgage insurance (PMI), you have at least 20 percent equity in your credit. Remember that your goal to refinance is to take advantage of lower interest rates. If you pay for the PMI, it defeats the very reason why you are refinancing, which is to save some amount.
Do I have a good credit score? Credit scores are another factor that plays a key role in securing a good mortgage rate. In fact, you need a good credit score to qualify for any type of mortgage at all. Aim for a credit score that is 720 or higher. If not, you might need to work on improving your credit first before applying for a home loan refinancing.
Does my old mortgage have a prepayment penalty? There are instances where a mortgage comes with a penalty for paying off a loan early. Yes, it may sound unfair, but that is how the mortgage industry works. The exact penalty will vary from one company to another, but the refinancing guide provided to the general public by the Federal Reserve Board provides this general idea: The amount is usually between one to six months worth of interest payments. So, find out whether or not your old mortgage company penalizes you for early repayment. Figure out the number and do what the number tells you.
There are more questions that should be asked and answered before you finally decide whether or not to go for mortgage refinancing.
Consider HomePlus Mortgage if you need assistance for home loan refi, Palm Beach, FL.
Contact us at (800)810-7587.