What to Expect When Refinancing a Mortgage
Many look to refinancing a mortgage as a means of taking some of the financial strain off their monthly proceedings. But it’s good to note that there are several considerations when going this route. Once all the financial commitments are added up, it may prove to do more harm than good.
That’s why LeapFrog Mortgage has dedicated our archive of literature to helping you navigate these decisions. Below we paint an even fuller picture of what to expect, and when it’s time to make the move. Read on for an even deeper dive into the subject.
Refinancing Doesn’t Mean No Charge
You have to keep in mind that refinancing is a service. That means there will be additional costs associated with picking this route. Your lender will likely charge a percentage of the overall loan amount as restitution. The good news is, this figure should be on the low end of single digit percentages.
There are also application fees, inspection fees, and other preliminary figures that you’ll be responsible for. We say this to help keep things in perspective. For as much support as a good refinancing can offer, know that you’ll still have to have some reserves on hand to cover the basics.
Timing is Everything
Interest rates are subject to changes based on a number of different factors outside of any one person’s control. If you purchased your home at a time when rates were higher, it’s good to look into during times of low rates. Even with the upfront costs, it’s likely still a great investment to ensure a lower rate moving forward.
Another changing factor is your income. If you’ve managed to reach a better financial standing compared to when you first got the loan, you’re likely in better shape for refinancing. Stronger credit, more stabile income, and more can assist here.
What if I Plan to Move Soon?
An instance where refinancing isn’t the best option is if you know you’re on a limited timeframe in the home. If you’re looking to move anytime in the near future, the costs for going this route may not be worth it. If you’ll be there long term, though, then this is certainly a worthwhile endeavor.
Likewise, if the current interest rates are higher than when you took on the loan, your best bet is to wait things out. No need in taking on a higher level of financial responsibility just to be in a worse off position.
At LeapFrog Mortgage, you’ll be in good hands. Whether refinancing, or managing your mortgage, we can assist. You can browse our services to see which is a best fit for your current needs. For any other questions, reach out to us via our contact page today