Homeowners should consider refinancing while interest rates are still low. Refinancing involves some up-front costs but can lead to significantly lower monthly expenses. It can involve the current mortgage company that retains a mortgage or a new mortgage company altogether. Below you will find NH home refinance advice including the costs and benefits of refinancing.
Is It the Right Time to Refinance a Loan
The real estate market can impact your refinancing options. If property values dropped from when you purchased the property, this may make refinancing more difficult. Lenders normally lend up to a specific percentage of the value of a home, which is determined by an appraisal. If your loan balance exceeds that mark, you may have to pay down your balance in order to refinance. FHA loans have the option of a streamline refinance that does not require an appraisal. There are also options for home buyers who are under water due to declining home values. A local mortgage professional can help you identify these different alternatives.
Mortgage Rate Change
The typical rule is to refinance when the prevailing rate is at a minimum one percent lower than your existing rate. The lower payment each month will make the up-front expenses of refinancing worthwhile. Also, some mortgage companies will not authorize a refinance until the savings exceeds a specific percentage.
Costs and Other Factors
There are fees associated with refinancing a home loan. These include closing costs, lender fees, up-front interest, and title insurance, just to name a few. The cost can differ depending on the mortgage company and type of mortgage. Understand these expenses prior to refinancing and compare it to the monthly savings. Also know that you will likely have one month without a mortgage payment, so those funds can go towards your closing costs.
About NH Home Refinance Advice
In addition to the NH home refinance advice detailed above, also factor in how many years you intend to live in a property since the savings accumulates when summed up over several years. Mortgage options are also influenced by your personal finances and credit rating, so contact a local mortgage officer for assistance. The advice above is generic and may not include everything specific to your loan or specific finances.