The latest data suggests that homeowners could save big if they go for refinancing today for their mortgages originated in 2018. That is because 80% of mortgages from last year carry an interest rate that is 0.75% higher than the prevailing rate today, which is 3.49% according to Freddie Mac.
There is one major factor why many are still not able to take advantage of mortgage refinancing – the lack of awareness about how the mortgage market works.
In this post, we are sharing some things to consider before you refinance a mortgage, Orange County, CA. Take note of the following:
Current interest rate – If you can get into a lower rate mortgage, a refinance is worth looking into. However, you will have to consider closing costs. Generally, at least a half-point to a full point reduction in the interest rate will save you enough money. You can cancel out the closing costs in just a few years when you get between 0.5-1% reduction on the interest rate.
Have paid down enough balance on your jumbo loan – If you applied for jumbo loan for your initial mortgage and have paid down enough balance, it might be worth-considering to refinance a mortgage, Orange County, CA. The question is how much is enough? If you have paid down the balance to less than USD 417,000, there is a big chance that you get a “regular refinance,” which means that you have a good chance to qualify for a lower interest rate even if the rates, in general, have not gone down significantly.
Length of time you stay in the home – If you do not intend to live in your home for at least two years then it’s probably not worth it to consider refinancing – unless, of course, if you are refinancing from a very high-interest rate to a much lower one.
Your credit score – If there is a great improvement in your credit score from your original mortgage, it may be an ideal time to go refinancing. So check your credit report and if you notice a significant change, you might be able to get a great deal on a mortgage. You should take advantage of it.
Want to refinance a mortgage, Orange County, CA but not sure whether or not you are getting a great deal? Talk to a mortgage expert at HomePlus Mortgage today.
Contact us at (949) 855-2905.