- Looking for a lower interest rate?
- Need to consolidate debt?
- Hoping to convert a variable rate to a fixed rate?
- Need a little extra cash for home improvements?
- Want a lower payment?
Do any of these questions sound like what you’re looking for? Then you may need to seek advice from a lender specializing in mortgage refinancing services Rockville, MD. Talking to a specialist can help you decipher through the pros and cons of a refinance.
What are the Pros and Cons?
- The number one asset of a new mortgage is getting a lower interest rate. Securing that lower rate can then in turn lower your monthly payment. Although, you will need to consider what will happen if you stretch your loan term back out to the 30-year mark. It may be a better benefit to pay a slightly higher payment per month at, let’s say, 25-years, and save a few thousand dollars in interest.
- Are you prepared for out-of-pocket costs? A lot of borrowers don’t realize that there will still be fees associated with a refinance. You are basically taking out a brand new loan and paying off your old loan, so, there will be a new set of closing fees and down payment requirements.
- If your main goal is to obtain cash for consolidation or home improvements then you’re biggest concern is going to be the appraisal. Your home may have had considerable value when you took out your original mortgage, but an appraiser is going to use recent comparable sales to determine the current value of your home. If the housing market is down you may get an appraisal that is too low to have a cash-out option on your refinance.
- Have you checked your credit recently? If not, you should do it immediately. Credit restrictions are going to be an enormous hurdle in the mortgage game. You are not guaranteed a refinance even if you have a current mortgage on your credit report. Do a check for yourself and make sure you don’t need to clean up that report before you apply.
- Are you getting a better deal for the long-term? That will be your ultimate “yes” if you should take on a refinance. Maybe you had less-than-perfect credit when you signed on the dotted line for your original terms and got a high interest rate. If you are trying to get out of a bad deal from your original loan, then yes, maybe the pros outweigh the cons.
Where to Start?
Do some research of your own with the help of a financial calculator. This will help you determine how much you will be saving or possibly not saving in the long run.
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Find yourself a qualified lender with proficiency in mortgage refinancing services Rockville, MD. Let an expert help you navigate through all the options that may be available to you. There are several knowledgeable firms just waiting to give you the advice you need. Contact someone today and get started on the process that might change your life.