Is it time to refinance your mortgage?
Refinance applications have skyrocketed due to favorable mortgage rates. How do you know if now is the best time for you? Here are some good questions to ask before refinancing:
1. Can I reduce my monthly payment by refinancing my mortgage?
Consider refinancing your mortgage if you can shave a percentage point from your rate.
2. What is the current value of my house?
If the value of your house has increased, you may benefit from refinancing. This gives you a chance to refinance for more than the balance of your mortgage and use that difference to pay for home improvements or pay down high-interest debt.
3. Am I weighing the costs vs. the savings?
There are upfront fees involved in refinancing your mortgage, but these may be included in your loan amount. It often takes as little as 12 months to recoup your costs, providing you with years of payment and interest relief.
4. What is my credit position?
Your credit score is a big factor in determining your rate. You may be eligible for a lower interest rate if your credit score has improved, which would indicate a push to refinance.