Salisbury Beach Home Loan Refinance Guidance

Homeowners should think about refinancing while mortgage rates are low. Refinancing involves some up-front fees but can lead to reduced monthly payments. It can take place with the existing mortgage company that holds a mortgage or a completely different bank. The following you will find Salisbury Beach home loan refinance guidance including the expenses and benefits of refinancing.

Determining When to Refinance a Loan

Consider the Home Values

The real estate market can affect your refinancing options. If property values declined from when you purchased the home, this may make refinancing a bit complicated. Banks typically lend up to a specific percentage of the value of a home, based on an appraisal. If your loan balance is higher than that mark, you may have to pay down your balance in order to refinance. FHA loans have the advantage of a streamline refinance that does not require an appraisal. There are also special programs for home owners who are under water due to declining market values. A local mortgage professional can help you identify these different options.

Mortgage Rate Change

The typical practice is to refinance when the prevailing rate is at least one percent lower than your existing rate. The monthly decrease in payment over the life of the loan would make it worthwhile. Also, some mortgage companies will not approve a refinance unless the savings exceeds a certain percentage.

Expenses and Other Factors

There are fees associated with refinancing a loan. These include closing costs, lender fees, pre-paid interest, and PMI, just to name a few. The amount can vary depending on the mortgage company and type of mortgage. Understand these costs before refinancing and compare it to the monthly savings. Also know that you will have a delay between when your current mortgage is paid off and the new one is due, so those funds can be put towards your closing costs.

About Salisbury Beach Home Loan Refinance Guidance

In addition to the Salisbury Beach home loan refinance guidance offered above, also consider how long you intend to live in a home since the savings accumulates over many years. Interest rates are also influenced by your personal finances and credit scores, so get information from a local mortgage professional for specific details. The guidance above is only an overview and may not cover everything applicable to your mortgage or specific situation.

Sponsored By:
Liz Ryan Loan Officer

About Editor-John P. Wells

I am a resident of Newburyport and have worked in education, high tech and urban development. My interests in architecture and construction are invaluable to my clients. For more information please visit the Wellsco website.

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