As one of the most well-known areas in the mortgage world, mortgage refinancing requires careful and prudent consideration. Referring to a process where a borrower acquires a new loan to help pay off their older one and often change the terms or payment amounts, refinancing can be done for several different distinct reasons depending on your situation, budget and personal preferences.
At Primary Residential Mortgage, we’re proud to assist clients with a wide range of mortgage services, from obtaining excellent mortgage rates to everything you need if you’re looking to refinance a mortgage. In this two-part blog series, we’ll dig into some of the basic do’s and don’ts we generally recommend to clients when it comes to refinancing their mortgage, as not everyone approaches this process from the proper perspective – part one is our list of do areas to promote.
If you’re thinking about a mortgage refinance, you should be taking significant time to carefully consider the costs and potential ramifications. You should be thoroughly evaluating several areas, beginning with the changes in rates and loan terms that often come with a refinance – will these save you money in the long run and help you accomplish your financial goals?
Speaking of goals, keep these well in mind. While some refinances are done to lower interest rates and little else, there are several other potential purposes for a refinance as well. You should be clear on why you’re doing this and what you hope to accomplish, which will make comparing the numbers far easier.
Another important task while considering a refinance is to speak with your current mortgage lender. Some refinances can be carried out by the same lender, while others may involve taking out a new loan – but if you have a good relationship with your current lender, they may be willing to match outside rates you’ve been quoted to save you some significant time and paperwork.
One vital factor to remember here: Mortgage refinancing is, in many ways, the same as taking out a new loan. Just because you qualified for your initial mortgage years ago does not mean your finances are in the same place today, and negative areas in your credit, income or related financial concerns could lead to denial of a refinancing application. Pay off as much debt as possible and look for other ways to repair your credit before applying.
One of the most common purposes of a mortgage refinance is to change from an adjustable interest rate to a fixed rate. The former involves far more variability and risk based on the market, something many buyers are not equipped for – the latter, however, involves a stable rate you can count on from month to month.
For more on the do’s and don’ts of mortgage refinancing, or to learn about any of our mortgage lender services, speak to the staff at Primary Residential Mortgage today.
*PRMI NMLS 3094. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Opinions expressed are solely my own and do not express the views of my employer.