Mortgage 101
September 30, 2021

When is the Right Time to Refinance?

Refinancing can help you save money, but it’s important to determine whether or not it’s the right time according to your individual financial situation. There are several scenarios in which refinancing might make sense for you. For example, maybe you want to take out some extra cash from your home equity to use on college tuition or a renovation. Or maybe you want to lower your monthly mortgage payment. The important thing is to identify your personal goals and decide if refinancing is the smart move for you. So how do you know if it’s the right time?

Mortgage Rates Have Decreased

Mortgage rates are always changing, so if you notice that they’ve gone down, that could mean it’s a good time to take advantage and save money. If rates have decreased 1-2% lower than your current rate, this might be a good opportunity to save some money. To understand if a refinance will be beneficial for you, speak to one of our experienced Loan Originators. They can assess your situation and help you understand if refinancing is right for you.

Your Home Value Increased

You may benefit from refinancing if the value of your home has increased. If this is the case, you may be able to do a cash-out refinance in which you replace your current mortgage with a new one for more than what you owe on your house and you receive the difference in cash. You can use that cash on a renovation project, tuition expenses, debt consolidation, or anything else.

You Want to Shorten Your Loan Term

If you’re looking to shorten your loan term and pay off your mortgage sooner, refinancing may be able to help. Refinancing to a shorter term can help you pay it off sooner and securing a lower interest rate may help you save some money as well. Just keep in mind that this could increase your monthly mortgage payment.

Your Credit Score Has Increased

Since your credit plays a big role in your interest rate, you might find that it’s a good time to refinance when your credit score has improved. Qualifying for a lower rate than your current one could mean savings. There are other factors in place that can affect qualification, so be sure to speak to your Loan Originator to determine what is the right move for your financial situation.

Ready to Refinance

Whether you’re sure you want to refinance or you’re just looking for some more information, our helpful Loan Originators are here to help you make the right financial decision for your unique needs. Be sure to contact us today to learn more.

Ready to get started?

Homestead Funding offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.