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Take these steps to determine if a refi is right for you.
Refinancing is not right for every financial situation, but it can help improve your finances in many situations. You can take these four steps to decide if it’s the right time for you to refinance your mortgage.
Mortgage refinancing is ideal when it’s done from a position of financial stability. That way, you can use refinancing to its best advantage to advance your financial goals.
Using refinancing when you’re behind on payments and having difficulty can be risky. But as long as you are using refinancing to get ahead, instead of catching up, it may be a very smart move for your finances.
Make sure to assess the quotes you receive to make sure the payments will work for your budget before you proceed with refinancing.
Refinancing can help you achieve some significant life goals. Make sure to think carefully about the goals you have as you move forward. This can help you decide what type of mortgage refinance is right for you and, if it’s a cash-out refinance, how much equity you want to cash out.
For example, let’s say you want to tap your equity to pay for higher education costs. You may also want to include funds for books and other costs in addition to tuition costs.
If you want to consolidate debt, you should total up your high-interest debts to see how much you need to pay those accounts off Any debts that are interest-free, such as some auto loans and credit card promotions, you may want to leave out.
When you use the Rapid Refinance request form, you can estimate things like the current balance of your mortgage and the value of your home. You can connect with lenders based on those estimates and then go from there.
But as you move forward, you will need to note a few key points about your current mortgage. Not only will you want to note your current mortgage balance, you will also want to note your interest rate. That will allow you to assess the cost savings on refinancing offers you receive.
The current market value of your home comes into play if you plan to do a cash-out refinance. Knowing the remaining balance on your mortgage will help you and the lenders that Rapid Refinance connects you with assesses if you have the funds you need.
The final step you should take to decide if it’s the right time to refinance your mortgage is to get quotes from lenders. That way, you can see what they have to offer to see if it will provide the benefits you’re looking for.
Requesting free quotes from lenders will not create any credit inquiries on your credit report or affect your credit score. Therefore, you can get as many quotes as you need from different mortgage lenders so you can find the best refinancing offer for you.
Using the Rapid Refinance request form allows you to get multiple quotes from lenders just by answering a few quick questions. You can then speak directly with lenders to get details on what they can provide.
This will help you decide if it’s the right time to refinance, and you can move forward with the lender you choose.
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Since this loan is a first mortgage instead of a second, it offers lower interest rates than home equity loans and HELOCs. First mortgages have some of the lowest rates possible on consumer financing, so it’s a cost-effective way to get cash. Even better, if you refinance at the right time, you can lower the interest rate compared to your original mortgage. This way, you save money as you pay off your home.
Mortgage interest is often tax-deductible, meaning you can lower your tax liability each year by deducting the interest you’ve paid. If you’re using part of the money you cash out to pay off other debts, you get a tax break in addition to lower APR. No other debt offers this kind of interest deduction.
With a mortgage, you know what to expect. You enjoy fixed monthly payments because it’s an installment loan. This offers advantages over financing like HELOCs, where the payments increase significantly after the 10-year draw period.
If you use the equity you receive to pay off things like credit card debt, you will decrease your credit utilization ratio. This measures the amount of credit card debt you have relative to your total limit. Paying off debt with equity may lead to a credit score boost. The trick is not to run up new balances!
Unlike basic refinancing where your balance remains the same, a cash-out refinance modifies your mortgage. The principal is higher because it includes the equity you cashed out. So you have more mortgage debt to pay off. If you are nearing retirement, this can put you at a disadvantage. Owning your home free and clear as you retire gives you more security.
Refinancing is not cheap. Closing costs amount to 2-5% of the new mortgage. If you get a $200,000 mortgage, the costs may total up from $4,000 to $10,000. Make sure that the equity you’re taking out AND the interest rate savings you may get are worth that cost.
If you borrow up to 90% of your equity (or anything over 80%) then you will need to pay private mortgage insurance (PMI). The lender will require this until you make enough payments to reach 80% CLTV.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Consectetur adipiscing elit.
Since this loan is a first mortgage instead of a second, it offers lower interest rates than home equity loans and HELOCs. First mortgages have some of the lowest rates possible on consumer financing, so it’s a cost-effective way to get cash. Even better, if you refinance at the right time, you can lower the interest rate compared to your original mortgage. This way, you save money as you pay off your home.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique.
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