If you have been wandering over the internet to find more about refinancing, then you know the importance of refinance rates!
There’s no denying that getting a mortgage even with a 1–2% drop in interest rate can make a huge difference in your monthly budget. And if you were thinking of refinancing from your current mortgage term down to a 15-year fixed-rate mortgage (which is recommended), make sure you do it right away.
What is Refinancing?
Refinancing can be defined as the process of getting a new mortgage by changing the terms of the one you already have on your home.
There could be significant reasons behind refinancing your mortgage include switching mortgage companies, lower interest rates, reduced monthly mortgage payments, or using money from the refinance.
One of the best things about refinancing is that you won’t be tied to two mortgages. Through the refinancing process, your first loan will be paid off and a second loan will be created in its place.
How Does Refinancing Work?
When it comes down to refinancing your mortgage, you will need to shop and apply for a loan. To check whether you qualify for refinancing, you can connect with a lender or use a broker.
Although lenders generally check different things, you must meet the following aspects to get the best refinance rates:
- A Maintained Original Mortgage: Make sure you show them proof that you’ve successfully maintained and paid your original mortgage for at least 12 months before they’ll consider your loan for refinancing.
- Equity: You’ll need to show you have at least 10–20% equity in your home.
- Income: You must show legal proof that you are getting regular income.
- Credit Status: Make sure you show them your credit score. Remember that having a lower credit score may result in higher interest rates.
When Should You Refinance Your Mortgage?
If you want the best of the best refinance rate, you must ensure you consider refinancing if:
- You Must Have an Adjustable Rate Mortgage
You may start off with the first few years if your ARM has adjustable interest rates. And the best part is that the rates can easily be adjusted on a multitude of factors like the mortgage market.
- Mortgage Length is Over 15 Years
Refinancing can be the best way to get locked in a 15-year fixed-rate mortgage if your original mortgage is a 30-year term.
- 3. You Have a High-Interest Rate Loan
As compared to ones in the current market, if your mortgage has a higher interest rate, then refinancing could be a smart financial move.
- Your Second Mortgage Is More than Half of Your Income
You could refinance your second mortgage along with your first one if the balance is higher than half of your annual income.
There’s no arguing with the fact that refinancing could be a lucrative option if it helps you take control of your monthly bills. If you have more money to put toward, you will become debt-free.
Final Thoughts
So, that’s a wrap to everything you need to know about refinancing your mortgage!
Are you looking for a credible platform online that can help you get the best refinance rate? If so, PureLoan is here to help you out!
PureLoan is a credible platform that may provide you the right refinance rates to make your home as affordable as much. With a dedicated pool of experienced professionals, we can search from a range of mortgage programs from more than 40 national banks and counting.
To learn more about the best refinance rates, visit https://www.pureloan.com/ today!
