In part one of this two-part blog, we defined some of the basics of mortgage refinancing and why many homebuyers choose this option at some point during their home loan. Whether to capitalize on equity, change loan term or even alter interest rates, refinancing can have several distinct benefits for buyers in a few different situations.
At Altius Mortgage and our partners at Mortgage Ogden, our mortgage refinancing solutions are second to none. In today’s part two of our series, we’re going to take a look at several tips and themes you should be strongly considering if you’re thinking of mortgage refinancing.
Refinancing a mortgage loan isn’t something that should be done on a whim – it should be carried out with a specific financial goal in mind, and within circumstances that allow for this goal to be met. The primary goal for most people refinancing is to lower monthly interest rates or overall payment amounts, so don’t simply jump at a refinancing option that doesn’t accomplish at least one of these goals for you.
If your goal is to capitalize on equity, on the other hand, be sure you’ve done the proper calculations and will receive the windfall you’re expecting in a way that won’t damage your future finances.
One of the primary financial areas to consider during a refinancing process are any fees or costs that come along with refinancing, and the lender you choose plays a big role here. Ask about a few important factors, such as whether these fees and costs will be rolled into your mortgage or be required up front. You should also ensure that interest rates are expressed clearly – certain unscrupulous lenders may try to offer “no-closing-cost-loans” that, while they do indeed hold off on these costs, will actually raise your interest rate or add to your principal balance in the process.
Disclosing Assets and Liabilities
No matter which lender you choose, transparency with your assets and liabilities is a must. Collect any related documents or important pieces and ensure they’re organized as well as possible.
Credit Score and History
Credit score and credit history aren’t just important during an initial mortgage application – they’re also a big part of refinancing. Ahead of any refinancing attempt, ensure your score is in an adequate range and take some steps to improve it if not.
Finally, while appraisals are not always required for a mortgage refinance, they’re valuable tools to utilize. A third-party appraisal helps you figure out the current value of the home, and can also help determine how much money will be awarded to you during a cash-out refinance.
For more on some basic tips for refinancing your home, or to learn about any of our mortgage services, speak to the staff at Altius Mortgage today.