Refinancing your mortgage may allow you to save on your monthly payment or take cash out of your home to pay for significant expenses. We have answered some common questions to ask when refinancing, which may help you determine if now is an excellent time to refinance and which mortgage company you should work with on your refinancing journey.
When Can I Refinance my Home?
Although there is no specific time frame as to when you can do so, it is not common to refinance soon after closing your original mortgage. We often advise our clients to wait about six months before they consider refinancing.
How Often Can You Refinance a Mortgage?
Technically, you can refinance your home as often as it makes financial sense to do so, such as if rates drop and you can lower your monthly payment. If you are looking for a cash-out refinance, then you must have equity built up in your home. If you recently got a mortgage, it may take anywhere from six months to one year to build up enough equity to benefit from a cash-out refinance.
Will Refinancing Help me Reach my Financial Goals?
First, you must determine your financial goals. Are you looking to lower your monthly payment? Or maybe you are looking to get cash-on-hand for upcoming expenses. Either way, defining a financial plan is imperative to understanding if refinancing will make sense for you.
One of the most common goals among homeowners is to find some extra monthly savings by lowering their monthly payments. If that is your goal, you may benefit from a rate & term refinance if rates drop. If your goal is to get extra cash-on-hand, then you must determine if you have enough equity in your home to take advantage of a cash-out refinance.
How Long Does it Take to Refinance a Mortgage?
Typically, a mortgage refinance will take anywhere from 30-60 days. The timeline may depend on the complexity of your financial profile and the state in which you live.
To get a better understanding of how long the process may take, get in touch with our mortgage specialists. We will review your current situation to determine if refinancing is right for you.
What Do You Need to Refinance Your House?
You will be required to complete a mortgage application and submit documentation to see if you qualify for the loan. You may also need to have a good credit score to show you have been responsibly paying off your monthly debts and making timely payments.
What are the Closing Costs Associated with a Refinance?
When refinancing a mortgage, you will have to pay closing costs, ranging from about 2-4% of the loan amount. The costs associated with refinancing may include origination fees, appraisal fees, title and settlement fees, and mortgage recording taxes. You will receive an estimate of closing costs at the beginning of your refinance process and discuss finalized costs with your loan originator during the closing process.
How Can I Look at the Terms of my Current Mortgage?
The best and easiest way to review the terms of your current mortgage is to look at your mortgage statement. If you don’t have one lying around, you may request a copy of your most recent statement from the company that services your loan (whichever company you make monthly payments to). The statement will outline your interest rate, remaining balance, monthly payment, and more.
Contact us to get started with your mortgage refinance!