Refinancing should be carefully evaluated as part of an overall budgeting plan, but it’s something to consider when interest rates have dropped substantially since the last time you financed your home, and you intend to stay for several more years. Refinancing is used to:
- Lower your monthly payment
- Reduce your interest rate
- Pay off your mortgage sooner
- Convert to a fixed-rate mortgage
- Pay for a major purchase or expense
To refinance, you will have to meet eligibility requirements, including:
- At least 20% equity in your home
- A good credit score
There are a few reasons why people consider refinancing their current mortgage. Understanding the big picture of what comes with getting a new mortgage can help you determine if refinancing is right for you. Ask your Starion Mortgage Banker for more information.
Use our mortgage calculator to see if refinancing is a good option for you.
Basically, a cash-out refinance pays off your current mortgage and uses your home equity to provide additional money for other uses. To decide if cash-out refinancing is appropriate, you need to weigh the benefit of how you’ll use the money against the amount of time it takes to pay off the loan. Here are some considerations:
- Are interest rates lower than your current financing?
- How much cash do you need?
- What’s the monthly payment amount?
- What’s the effect on your taxes?
- What’s the total cost of borrowing?
- What’s your break-even point?
For more expert guidance on refinancing, contact your Starion Mortgage Banker.
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