Refinancing your home loan is a big decision for many New York and Connecticut homeowners. Interest rates and points change from year to year and even from day to day. Additionally, your financial situation changes over time. If your credit rating has improved or if interest rates are lower now than they were when you first financed your home, now might be the time to refinance your mortgage. Consider the following refinancing benefits to determine if taking out a 2nd mortgage makes sense.

Refinancing your mortgage can help you in numerous ways.

  • You may be able to take advantage of lower interest rates that will lower your monthly mortgage payments.
  • You might be able to pay off your home loan faster and save on interest charges.
  • Alternatively, you could increase the length of your mortgage, spreading the payments out and getting lower monthly charges in the process.
  • You could change the terms of your mortgage from a fixed-rate mortgage to an adjustable rate mortgage or vice versa.
  • Other financial opportunities could quite possibly present themselves if you refinance. You can refinance your mortgage for a higher loan amount, quickly getting funds for other expenses such as home renovations, college tuition, medical costs, debt consolidation or more.
  • If you currently own at least 20% of the equityEquity is the difference between what you owe on your home and the value of your property. in your home, you will no longer need to pay private mortgage insurance. Refinance your loan to save money by ridding yourself of this unnecessary monthly expense.

When does it make sense to refinance your mortgage?

It’s best to time your mortgage refinance correctly. Take a look at the following circumstances to determine if the timing is right for you to refinance your home loan.

  • Do you have a fixed rate mortgage? If so, have the interest rates fallen to levels below the rate that you are currently paying?
  • Do you have an adjustable rate mortgage (ARM)? If so, are the interest rates starting to rise?
  • Have you been re-paying your current 30-year mortgage for less than ten (10) years? Is so, are he interest rates lower than your current rates?

If you answered yes to the questions above, it might be a good idea to refinance your mortgage.

What are the costs associated with a mortgage refinance?

When you refinance your home loan, expect to pay from 3-6% of your outstanding principal in fees. As with your current home loan, there are closing costs associated with refinancing your mortgage. The most common closing costs are as follows.

  • Application Fee
  • Loan Origination Fee
  • Discount Points
  • Appraisal Fee
  • Title Search Fee
  • Title Insurance Fee

Knowing if it is worth it to refinance your home loan can be confusing. Additionally, there are costs involved in refinancing… just as there were costs involved in obtaining your current mortgage. But home loan refinancing usually has long-term benefits. At Homerica Mortgage Corporation, our loan officers are here to help you find the right refinancing solution for you. Call us today at 877-451-3100. We’ll evaluate your mortgage needs and draft a refinancing plan that will save you money.