Recently, you may have flipped through a real estate magazine trying to decide what the attraction is to refinancing, and it may also occur to you that refinancing might be right for you as well. Naturally, you’ll have questions; this page is here to answer some of those most pressing inquiries. If you’re not new to the process, then nothing has changed, but perhaps you need a refresher course? If you are new, the refinancing or mortgage process might seem complicated and intimidating. Relax; we’ve done the research for you!
Rate cuts are one of the major factors in the refinancing hype. After recents cuts, mortgage interest rates are reaching record lows, which enables California’s homeowners, and prospective homeowners to take advantage of these serious benefits.
There are now new loan programs, recently introduced to California over the last few years that have significantly lowered monthly payments. This is your time to learn about refinancing!
The end of ‘PMI -Private Mortgage Insurance’. Many people that have been paying PMI have recently discovered that the value of their homes has increased enough to refinance and no longer pay PMI.
Refinancing Common Questions
I refinanced a couple years ago, –is it practical to refinance again so soon?
The dependent factors here are longevity of inhabitance (at the home), your interest rates, and the amount of your mortgage. Once you’ve assessed each of these factors, record them and ask an objective professional for advice.
What kind of money can I save on monthly payments?
For each .5% decrease in interest rates per $100k loan, you’ll save an estimated $30. Use this formula to estimate your own savings for refinancing, and if they work to your favor, record them and place the estimation with your notes.
Can I tap the equity if I refinance?
Absolutely! Many people use this cash out for remodeling, home improvements, or even ‘capital home improvements’, –which basically include improvements such as extra rooms, a new roof, or pool, –to force appreciation of your home’s value. You can even add to the education fund for your children.
Should I choose a new lender when I refinance?
Many people choose to remain loyal to their initial mortgage lender, because they believe the process will be easier, with less paperwork. In all actuality, you may be settling for less; not only are you limiting your own options by prioritizing loyalty, but you’ll also have to do all the same paperwork over again and be re-verified.
Are there benefits to refinancing a fixed rate loan in favor of an adjustable rate loan?
The plain truth is, interest rates on adjustable rates fluctuate; the dependent factors once again include how long you plan to live in your home, and a willingness to gamble on a possible rate increase. However, the monthly savings on an adjustable rate mortgage can often be substantial, occasionally even shocking!
Will there be out-of-pocket costs?
No! You can counteract, and pay nothing out of pocket if you roll the cost of refinancing into your mortgage.