Need a better interest rate? Has your credit report improved? Having trouble making your monthly mortgage payments? Those are just a few reasons to consider refinancing your home. It may seem like an intimidating process but here are a few simple things to consider before making a decision.

The financial situations in our lives change with each passing year and a long term loan may not be as desirable as they once were. As our careers and life move forward, unexpected expenses may arise and need to consolidate debt or you may be making money and thus be able to improve your interest rate via refinancing. With a lower interest rate comes hundreds of dollars worth of savings a year that can be allocated for use in other aspects of your life or used for savings. You may have also made changes to your home and thus bringing its value above what it was when you initially financed it.

As you pay debts off, continually pay bills on time, maintain a low debt to income your credit will improve and will be the prime time to consider refinancing. With inflation, market movements, and monetary policy changing, mortgage rates frequently drop and increase. You should hold out until it drops 1 to 2 percent of your current rate. Keep in mind as well, that just like the fees that come with your initial mortgage, there will be fees such as origination fees, mortgage application fees, title insurance/search and appraisal fees that will conservatively be just above $1000.

If you’re trying to save money and can’t afford these costs, it might be beneficial for you to wait longer to save or wait for a better rate. Further, remember that refinancing means you will paying on your loan for a reset 30 years. You should also calculate your break-even point, how the overall costs (including total interest) of your current mortgage and refinanced loan would compare.

For more information or to get started on your refi, contact us here at EC Mortgage Lenders. Our team of knowledgeable mortgage professionals can assist you in deciding the right time to refinance.