How to Know When It’s Time to Refi?

Filed under: Market Comentary

We’ve been talking about how great interest rates are for a few years now and when rates are low, there’s always that thought that maybe it would be advantageous to refinance the house.

Woman dreaming of financial successSo how do you know if a refi actually makes sense?

Here are a few refinance “triggers” and if one or more occurs in your life, then it could be wise to consider a refi.

Major Life Event

In the event of a marriage, divorce, or death/illness of a spouse, refinancing could make a challenging financial situation a little easier.

Your Credit Score Has Improved

If your credit score has improved dramatically from where it was when you received your current loan, then refinancing now could mean better terms, a lower rate, and a lower payment.

Shorten the Term of Your Loan

If you’re in a position to actually pay a bit more every month, you may want to pay your house off early with a shorter term loan.  If this is something you’re considering, we can run various scenarios to tell you exactly what your new payment would be and how much you would save.

You Have Positive Equity

If the value of your home has risen and you now have significantly more equity than before, a new loan at this lower loan-to-value could give you better terms, lower your payments, and allow you to get rid of any mortgage insurance you may have been paying.

You Need Cash

If you have adequate equity available, it may be possible for you to get cash back from a refinance that could allow you to make home improvements, pay off higher rate consumer loans such as cars or credit cards, or help with obligations such as college tuition.

Obviously, these aren’t the only considerations when deciding on a refinance, but they are some of the more common reasons that lead to refi’s.  The most important factor is to consider all scenarios, look at the numbers, and make a sound financial decision.  I’m here to assist you in gathering the information you need and to answer any questions you might have.

Feel free to contact me at any time.

Franklin Loan Center | NMLS 237653
Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, 4131316
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