6 Things to Know Before You Refinance Your Mortgage

Business

If you are looking out to Refinance in Manchester, New Hampshire, it is an excellent thought as a long-term financial decision. But the decision to mortgage the re-finance is subjective. It depends on your circumstances and also on the current mortgage rates in the market. Ahead of planning to refinance your home, know the following 6 things before you refinance your mortgage-

1. Ask yourself, why you want to refinance your mortgage?

Knowing the reason why you want to refinance your mortgage will help you decipher several questions like what you want by refinancing your mortgage, is it because it is going to give you cash benefits? Is it a long term or short term financial decision? Are the rates lower? Post answering such questions will make it easy for you to approach the right professional for the work.

2. Knowing your home equity

Knowing the equity value of your home helps you make better decisions. If the equity value is too low, you might want to rethink your decision. Also, with low home equity rate, you might want to consider going to the right mortgage lender to discuss your individual needs.

3. Credit Score and your Financial position

Lenders have become stricter in approving loans so having a good credit score is an utmost necessity. 760 or higher is a good credit score to have. The ones with lower credit scores might qualify only for higher interest rates.

The better your financial position, the more options of getting a loan is available to you. Factors like increasing income or high income, stable work or job history, enough savings, and the fact that you have paid off another loan or otherwise reduced debt help better your chances of getting a loan.

4. Finding out your break-even point

For this, you need to work out your break-even point. Calculate how much will be your monthly savings from your refinancing. Then work out the total fees you have to pay and the refinancing costs which is between 3% to 5% of the total amount of the loan. Finally, divide the cost by the savings. It is your break-even point, that is the months it will take you to recover the cost of refinancing and start seeing the savings.

5. Consider the duration you plan to stay in your home

If you are planning for your long stay in your current home and also the break-even point would not take you too long to reach, you will benefit from the savings. However, if you are looking to upgrade or move to a new location, you should find the lowest interest rates in the short term.

6. Hire the right lender

Hiring the right mortgage lender to Refinance in Manchester, New Hampshire is very crucial. After you have made your decision to refinance your home, conduct a search for a lender who will consult and navigate you to get excellent rates and terms for your refinance.

Hope the above points that cannot be missed are enough to help you make your decision to Refinance in Manchester, New Hampshire. For more information, click here.