Over the past couple of weeks, many customers have asked if refinancing is a good option.
Q1: Can I refinance now since the interest rates are low?
It depends on two key factors. 1) The interest rate on the current mortgage 2) The number of years left to pay off the mortgage
Q2: Will there by cost incurred when refinance?
Yes, typically 2 to 3% of the amount being refinanced.
Q3: Why can’t the lender lower the rate without any closing costs?
Refinancing is paying off the old mortgage and get a new loan for a lender. In doing so, the new lender will need to perform credit checks, appraisal, get a new lender title policy, etc. to approve the loan.
Q4: What are the general guideline to refinance?
There are two factors to consider. The difference in the rate between what one is paying currently and the new loan should be at least 100 basis points i.e., 1%. Secondly, one should plan to hold the property for at least 3 to 5 years to breakeven the closing costs.
Q5: What type of mortgage is good?
It depends on your situation, as there are many lending products. Talk to a reputed lender for additional guidance.
Q6: What factors will be considered during refinancing?
A few factors that will be considered are Credit score, the value of your property, current equity, income, assets, and liabilities (car payment, credit card payment, etc.,)
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