what does it mean to refinance you home?
Refinancing is when you acquire a new mortgage in an effort to reduce monthly payments, lower your interest rates, disburse cash out of your home for large purchases, or change mortgage companies. Many people refinance their homes are equitable. That is when the worth of the home is greater than the amount owed to the mortgage.
TIPS ON HOW TO REFINANCE YOUR HOME
make a move fast
Rates might not be expected to shoot real high this year, but they’re likely to stay on a steady, upward course.
It’s good to research and see what rate you can get, then act on it before it’s too late. Get you refinance application in as soon as possible.
make sure you have good credit score
Your credit score plays a big part. Even when low case are out there, it doesn’t mean you will qualify for them.
Pay your bills on time, keep a safe distance from your credit limit and check on your credit report for errors. These are some ways you can work on your credit.
Take advantage of rising home prices
Just like the rates, home values are often on the upward course. To access your home’s increasing value through a home-equity loan or home equity line of credit might be to your advantage.
refinance on a shorter term
Refinancing into a fixed-rate loan with a shorter term can save you money in two ways: the interest rate is lower because it’s at a fixed rate, and the shorter term means you can save more money over the life of the loan by paying less interest.
lastly, pay points
You’ll have the option to pay points on your mortgage before you loan ends, which is paying money upfront. This will permanently lower your interest rate.
While one point equals 1% of your loan amount, paying in full point isn’t always an option. The amount of money you have to pay to buy down your rate depends on the interest rate market, according to Case Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage. He says that if the market is volatile, then you’ll probably have to pay more to buy down the rate. But if the market is stable, then you’ll pay less. It makes sense for you to wait until rates stabilize so you can pay less.