Interest rates are at historic lows. There are many things to consider when thinking about refinancing, here are a few:
- Look at the current terms of your mortgage
- Length of your loan, current interest rate, whether you have a fixed or variable interest rate, and what your current monthly payment is
- Reasons to refinance
- Lower interest rate, which then gives you a lower monthly payment
- Variable vs. fixed
- If you have a 30-year fixed mortgage you may be able to decrease the term to 15 or 20 years
- Is there a certain amount of equity you need in your existing loan to refinance?
- Conforming loan – 5% equity
- Jumbo loan – 20% equity
- What can you expect to pay in closing costs?
- Approximately 1% of your loan balance
- How does your credit score impact refinancing?
- If you have a higher credit score, you can expect a lower interest rate
- A credit score of over 740 puts you in the best position
- Should you use the same lender as your previous loan?
- While this is not necessary, there may be benefits
- Can be easier if you already have a relationship, but if rates are lower elsewhere it may be worthwhile to use a different lender
These are just a few things to consider when thinking about refinancing your mortgage. Please feel free to reach out to Liz Garvey or Beth Parker team with any questions at 888-992-8601 or planning@barryia.com.
Here is a link to our podcast with special guest Donna McKeown, who is a Senior Loan Officer for Mortgage Network:
Best Regards,
The Barry Team
