Is Refinancing Right for You?
For homeowners, there are many reasons to refinance a mortgage. Whether it be for the opportunity to obtain a lower interest rate and lower monthly payment amounts, to shorten the term of the mortgage, or the opportunity to consolidate debt, refinancing can offer many great financial opportunities for homeowners. However, refinancing can also become a major risk if you're not careful. The danger in refinancing lies in ignorance. Without the right knowledge it can actually hurt you to refinance. So, MHQ Mortgage Headquarters wants to take this time to help you determine whether refinancing is right for you or not. Consider these questions:
What is Your Purpose for Refinancing?
Homeowners often have different reasons for refinancing. It could be for consolidation of debt, home improvement, or for a major purchase. It could also be for other personal or financial reasons, perhaps taking a loan for cash to purchase a car. Before refinancing for certain purposes, especially when those purposes are to help with a financial burden, it's best to consider all possible risks. While refinancing can offer lower monthly payments and possibly lower your interest rate, there can also be the possibility of over financing what the borrower can realistically afford that could result in foreclosure due to inability to pay if the homeowner isn't careful.
Are You Considering Moving in the Near Future?
Unless you plan to live in your home longer than at least half of the refinance term, it may not be worth the hassle to refinance. If you are considering moving soon or think you will outgrow your home, refinancing isn’t for you. If you move within a few years of refinancing, the savings likely won’t outweigh the closing costs, and that will make you less likely to want to move. Refinancing is a better option for those homeowners who see themselves living in their property for years to come.
How's Your Credit?
Typically, the purpose of refinancing a mortgage loan is to allow a borrower to obtain a better interest term and rate. For borrowers with a perfect credit history, refinancing can be a good way to convert a variable loan rate to a fixed, and obtain a lower interest rate. While your credit score may have been outstanding when you first obtained the original loan, many things could have changed over the years to change your credit status, and before a lender can refinance your loan, they'll need to run another current credit report. Borrowers with less than perfect, or even bad credit, or too much debt, refinancing can be risky and can actually cause your interest rate to increase.
The Bottom Line
Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan or helps you build equity more quickly. When used carefully, it can also be a valuable tool in getting debt under control. Before you refinance, take a careful look at your financial situation to determine if refinancing is the best option for you. One of our mortgage experts would be happy to sit down with you to review your options and help you make the best choice for your financial needs. If you're considering refinancing your mortgage, trust in the mortgage professionals at MHQ - Mortgage HeadQuarters to have your best interest in mind. We can help you choose a mortgage program that's right for you and your specific needs!
Mortgage Headquarters of Missouri, Inc
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
NMLS # 1229111
What is Your Purpose for Refinancing?
Homeowners often have different reasons for refinancing. It could be for consolidation of debt, home improvement, or for a major purchase. It could also be for other personal or financial reasons, perhaps taking a loan for cash to purchase a car. Before refinancing for certain purposes, especially when those purposes are to help with a financial burden, it's best to consider all possible risks. While refinancing can offer lower monthly payments and possibly lower your interest rate, there can also be the possibility of over financing what the borrower can realistically afford that could result in foreclosure due to inability to pay if the homeowner isn't careful.
Are You Considering Moving in the Near Future?
Unless you plan to live in your home longer than at least half of the refinance term, it may not be worth the hassle to refinance. If you are considering moving soon or think you will outgrow your home, refinancing isn’t for you. If you move within a few years of refinancing, the savings likely won’t outweigh the closing costs, and that will make you less likely to want to move. Refinancing is a better option for those homeowners who see themselves living in their property for years to come.
How's Your Credit?
Typically, the purpose of refinancing a mortgage loan is to allow a borrower to obtain a better interest term and rate. For borrowers with a perfect credit history, refinancing can be a good way to convert a variable loan rate to a fixed, and obtain a lower interest rate. While your credit score may have been outstanding when you first obtained the original loan, many things could have changed over the years to change your credit status, and before a lender can refinance your loan, they'll need to run another current credit report. Borrowers with less than perfect, or even bad credit, or too much debt, refinancing can be risky and can actually cause your interest rate to increase.The Bottom Line
Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan or helps you build equity more quickly. When used carefully, it can also be a valuable tool in getting debt under control. Before you refinance, take a careful look at your financial situation to determine if refinancing is the best option for you. One of our mortgage experts would be happy to sit down with you to review your options and help you make the best choice for your financial needs. If you're considering refinancing your mortgage, trust in the mortgage professionals at MHQ - Mortgage HeadQuarters to have your best interest in mind. We can help you choose a mortgage program that's right for you and your specific needs!
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
NMLS # 1229111
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