At some point, numerous homeowners ask themselves, “Should I refinance my mortgage?” And while some offers of lower interest rates and saving money may seem like refinancing is your best option, consider your unique financial situation before deciding.
You may be asking yourself, “where do I start in the process?” Here are three quick checklist items to help you get started on your refinancing journey:
If you’re setting out to pay down your mortgage loan faster than your original loan term, you may want to consider refinancing your mortgage.
For example, you closed on your home with a mortgage term of 30-years. However, your financial situation has changed, and you’re able to pay off more of your mortgage faster. You can opt to refinance your current mortgage loan for a shorter-term loan with a lower interest rate and pay more toward the principal of the loan itself.
For those satisfied with their loan term, who just want a bit more on the monthly savings and better fixed interest rates, refinancing may be a great option for you.
Some mortgage lenders may allow you to refinance with them, especially if you’ve paid your monthly mortgage payment on time every month since your approval. Depending on your lender and their terms, you may be able to refinance your current mortgage for a better monthly payment with a lower interest rate and still maintain your loan term and schedule.
Before you decide to fully jump into refinancing for the better interest rates and lower monthly payments, find your break-even point. This is the point where your wallet starts to bulk up on savings over doling out for expenditures toward your mortgage payments.
For example, once you’ve calculated refinancing costs such as your bank costs, title and escrow fees, along with any other third-party expenses, you should have two numbers. One of those numbers is the amount you may be saving with refinancing and the cost to refinance. You’ll then want to divide the expected monthly savings into the overall cost to refinance.
Your equation may come out like this:
$5,000 (refinance costs) / $500 (savings) = 10 months before breaking even
In this scenario, you’d end up seeing savings around month 11. However, the break-even point will change based on your specific financial situation, lender terms and any other financial variables that may come into play.
Homeowners may refinance their homes for a variety of other reasons. Regardless, it’s always a good idea to make sure your finances will benefit from a home refinance. After all, it’s important to make sure this financial move benefits you and your household rather than hinder your financial health.
“I sell your home like it's mine”
A licensed real estate salesperson since 2016, Rob is affiliated with the Briarcliff Manor office of Corcoran Legends Realty. He serves buyers, sellers, renters, in Westchester, Rockland, and Putnam counties. Rob, a native of New York and Westchester County for most of his life, brings an extensive local knowledge of both residential and commercial properties to the table. His experience includes a wide range of property types – single-family, multi-family, condos and mixed use. “Hard to sell” properties is where Rob really excels. “There’s no problem that cannot be solved.”
Rob is certified for many different disciplines in real estate. Cartus Relocation Network Agent, AARP Agent, National Tenants Network (NTN) Agent, Green certified and Pricing Strategies Master. In addition, Rob has completed the Leader’s Edge Advanced training to better serve his clients. Rob has been both associate of the month and top closed dollar agent.
When you work with Rob, you get the feeling you’re his only client. Numbers don’t count, you do. Clients always come first. Each transaction is handled as if it were his own home. Rob strives to make the process as seamless as possible and takes care of all the details, no matter how small. His clients rave about his above-and-beyond service and prompt informative communication. Rob is easy going, friendly, and patient. However he can be a determined and aggressive negotiator when the need arises.
When not out actively working on behalf of his clients, Rob spends time with his wife and two teenage daughters. A devoted supporter of community he sits on several local boards and volunteers for numerous locale nonprofit organizations. He enjoys cycling, hiking, kayaking and winter skiing.
“May your price be right, and your sale be swift!”