| If you've ever wondered if "now" is a good time to | | | | substantially increase your credit score you may find |
| refinance your home loan, you're not alone. Many | | | | that you'll now be able to secure a lower interest rate |
| people are unsure of when is the right time to | | | | through mortgage refinancing. |
| refinance and thus, have a hard time moving forward | | | | 5. When you want to eliminate private mortgage |
| with the process. If you think it may be the right time to | | | | insurance (PMI) – If your loan balance is less than |
| refinance, the best thing you can do is to start your | | | | 80% of your home's value, private mortgage insurance |
| research. To begin, see if the following seven signs | | | | (PMI) is usually not required. This means if you have |
| may be pointing you to seriously consider mortgage | | | | built enough equity in your home, you don't necessarily |
| refinancing. | | | | have to refinance your mortgage to eliminate PMI. In |
| | | | | this case, eliminating PMI will cost you nothing. |
| 1. When percentage rates go down – Typically, if | | | | However, if you think your home has appreciated |
| you can secure at least a half a percentage point | | | | enough to eliminate PMI and you want to potentially |
| lower than your current interest rate, it may make | | | | speed up the process, you may want to think about |
| sense to refinance. However, if you are able to secure | | | | refinancing in order to cut out this often unnecessary |
| at least a one point decrease or more, it is usually | | | | extra payment in another way. |
| worth refinancing. | | | | 6. When you want to build equity faster – If you're |
| 2. When you do the math – Divide the total cost to | | | | less concerned with keeping your mortgage payments |
| refinance (including closing costs and various fees) by | | | | low and care more about building equity quickly, you |
| the amount of money you'll save per month. The | | | | may want to consider refinancing your 30-year loan to |
| quotient you get is the number of months it will take | | | | a 15-year loan. While your payments will inevitably |
| until you start experiencing the savings from | | | | increase, you will enjoy the added security of knowing |
| refinancing. For example, if you estimate it will cost you | | | | you are building valuable equity at a more rapid pace. |
| $2,000 in closing costs and fees but your monthly | | | | Additionally, you will benefit if you ever need access to |
| savings will be $200 a month, then you know that it will | | | | that equity in the future. |
| take 10 months to start seeing the savings from | | | | 7. When you want to switch loan types – Another |
| refinancing your mortgage. | | | | reason people refinance is to switch mortgage loan |
| 3. When you think you'll be in your home for years to | | | | types. Many times, those who originally financed their |
| come – After you do the math, look to see if the | | | | home with an adjustable rate mortgage (ARM) loan |
| number of months from the quotient above is at least | | | | and weren't planning to stay in their home for an |
| how long you plan to stay in your home. If it's not, then | | | | extended period of time often look into refinancing to a |
| refinancing may not be the right choice for you. | | | | fixed rate loan after the lower introductory period of |
| However, if you plan on being in your home well over | | | | their ARM comes to a close. This way, you can enjoy |
| the amount of time it will take you to break even, | | | | the initial attractive rate of an ARM loan and then take |
| refinancing is probably in your best interest. Not to | | | | advantage of the steady payments that come with a |
| mention, beyond breaking even with your monthly | | | | fixed rate mortgage loan once you refinance. |
| savings, it is important to note that you will probably be | | | | |
| saving thousands of dollars in interest throughout the | | | | Refinancing can be a great way to save money, build |
| life of your loan. While this savings is less obvious up | | | | equity, and take advantage of attractive interest rates. |
| front, it is an important to keep this is mind when | | | | However, it is always important to factor in all the |
| weighing the benefits versus the costs. | | | | variables before making your final financing decision. |
| 4. When your credit score has gone up – | | | | Be sure to realistically consider closing costs and other |
| Depending on your credit score when you initially | | | | fees that may arise so you are never left unprepared |
| secured your mortgage loan, the interest rate you | | | | when making the best decision for you and your |
| received may have been a little higher than you would | | | | family. But, if you do decide that mortgage refinancing |
| have preferred. Often, lower credit scores result in | | | | is the smart choice for your situation, be sure to shop |
| higher interest rates because lenders consider the loan | | | | around for the interest rates that you feel comfortable |
| higher risk. Lenders are constantly reevaluating the | | | | with. Companies like Nationwide Bank offer attractive |
| criteria they look for when offering a customer a | | | | mortgage refinance rates to help you pay less on the |
| specific interest rate. For example, a credit score that | | | | money you borrow. Start your online mortgage |
| was once considered "excellent" now may only be | | | | application today! |
| considered "good." However, if you've been able to | | | | |