One of the best reasons to refinance is to lower the interest rate on your existing loan. Historically, the rule of thumb was that it was worth the money to refinance if you could reduce your interest rate by at least 2%. Today, many lenders say 1% savings is enough of an incentive to refinance.
REASONS TO REFINANCE:
- You have an existing loan you would like to improve in some way
- You apply for the new loan
- The new loan pays off your existing debt
- You make payments on the new loan until you pay it off
Refinancing to cash out on home equity entails qualifying for a loan
amount that's higher than your current mortgage balance. A no cash-out refinance allows you to change your interest rate and lengthen or shorten your repayment term. Refinancing involves many of the same closing costs as a purchase mortgage.
Once you have a clear goal in mind, you'll want to evaluate your financial situation. There are four keys things to look at: your credit score, your monthly mortgage payment, the value of your home and your debt-to-income ratio (DTI).
Let MDE Home Loans take a closer look and analyze your Home financing needs TODAY!