If you currently have a mortgage, you will likely consider refinancing at some point or another. After all, you want to ensure you’re paying the best rates, right? And you want to ensure you’ll have no problem making payments on your home. That’s why you need to know a good time to refinance mortgage.
When is a good time to refinance your mortgage? One would be when the interest rates go down. When interest rates on home mortgages go down by at least one whole percentage point is time to start looking at your options. If you have good credit, you may qualify for that full percentage point decrease. That’s going to help you save money in the long run. But it will only be a good idea if you have good credit or the rate is less than 1% down.
Any decrease is an excellent way to go. But the truth is that the fees and other expenses will counter anything less than an entire percentage point to get your mortgage refinanced. That means you will save less than you think and could owe more overall.
Good Time to Refinance Mortgage When Struggling
Another good time to refinance a mortgage is if you’re struggling to make payments. If you can’t afford the payments, you should refinance and stretch out your mortgage again. You can get a lower interest rate (especially if your credit has increased since you first got your mortgage). Or if the rates overall have decreased. Then, you can stretch the mortgage to a longer term that will help you lower overall payments.
This will help you make the payments and will help you stay on top of your bills. You can talk with your mortgage company if you only have a short-term problem making the payments. Otherwise, look at full refinancing options. You can lower your payments entirely, which could help you long-term.
Of course, it’s essential to look at what you can afford and whether changing your mortgage payments is a good idea. Extending your mortgage is a good idea because it helps lower your payments. But you’ll pay more over the long run because you pay more interest (even if the interest rate is lower). You’ll want to consider it before you take that step.
Is it a good time to refinance mortgage? You can contact LoanDepot to find out more and see if it’s your right decision.