Mortgage refinancing can be a complex undertaking, particularly for beginners. There are many industry jargons that, when misconstrued, could lead to a decision that isn’t favorable to borrowers. With this, it is imperative to ask questions. It is beneficial to ask for help from mortgage experts.
Speaking of asking questions… There are several questions that you need to ask and answer before you even call your prospective lender to express your intent to refinance your home loan, Daytona Beach, FL. Some of these are the following:
How old is my current mortgage? It makes no sense, for instance, to go for a 15-year mortgage (or above) if you only have 5 to 10 remaining years on your current loan. That is because, in the end, you might be paying more rather than saving some amount. And it defeats the primary purpose of refinancing.
Do I plan to stay in this property for a long time? If you do not have any plan to stay in your home longer than, let’s say, 3 years, then you might want to reconsider refinancing. The reason? Because it would take a longer time to recover the costs of refinancing. To figure it out, divide the amount you’ll pay in fees by the amount you’ll save each month to get the number of months to break-even on your loan.
Do I have enough home equity? Your equity is the percentage of the home that you own outright. Meaning, it is the portion of your home that is not currently mortgaged. It grows as you pay down your loan.
Equity is one of the items that a lender will look into when you refinance your home loan, Daytona Beach, FL. Those who have at least 15% to 20% equity in their property get better deals.
Does my present mortgage have a prepayment penalty? If your current mortgage has a prepayment penalty, you might be charged a fee if you go for refinancing. Because that would mean you are paying off your current loan well ahead of the due date. Of course, you might find this as an unfair practice but that’s how the industry works. So, figure out the number and do what the number tells you.
You home mortgage experts at HomePlus are readily available to attend to your other questions about home loan, Daytona Beach, FL.
Contact us at (800)810-PLUS (7587)
