Refinance Your Mortgage, but Only if It Makes Sense!

With today’s low mortgage interest rates, there are many great reasons to consider refinancing. Many homeowners have already refinanced their mortgage into a lower interest rate loan, and they are now benefiting from a lower monthly payment. If you currently have a mortgage that has a higher interest rate than what is available today, you should absolutely look into refinancing into a lower interest rate option while rates are still low. It may be possible to lower your payment by hundreds of dollars per month.

Refinancing makes sense for many homeowners because there are several benefits to a low fixed interest rate mortgage. But, there are certain situations in which refinancing is not necessarily a good option. Here are a few examples:

You know that you are going to move sometime in the next several months or year. If you are almost certain that you are going to move within a relatively short period of time, it might not make sense to refinance. You may be responsible for paying closing costs, an appraisal, and other fees when you refinance. The total amount of these expenses might make refinancing a poor financial choice if you know you are going to sell your house in the near future. Make sure to take this into consideration before refinancing a mortgage that you know will be paid off when you sell the house in a few month or a year.

You are very close to retirement. If you’ve been paying a 30-year mortgage for 25 years, and you have five years left on your current loan, you might not want to refinance – especially if you are near retirement age. It does not necessarily make sense to refinance a mortgage that is very close to being paid in full. Consider the fact that in a few years, your current mortgage will be paid in full and if you refinance into a new 15-year or 30-year mortgage, you will not own your house free and clear for quite some time.

You may not be able to qualify for a better interest rate mortgage. If your credit score has dropped significantly since the last time you applied for a mortgage or you have an excessive amount of debt that you did not have when you obtained your current mortgage, you might not qualify for a better fixed rate mortgage than your currently have. While there are excellent interest rate options available to many homeowners interested in refinancing, these rates are not available to everyone. If you are interested in refinancing, talk with your mortgage broker and find out if you qualify for a better interest rate before starting the application process.

The goal of The Home Loan Arranger is to help as many homeowners refinance into a low fixed rate mortgage as possible. But if it doesn’t make sense for a homeowner to refinance, there should never be pressure to enter into a financial situation that does not benefit you. For more information, make sure to schedule an appointment with a reputable mortgage broker for expert advice and guidance on whether or not it makes sense to refinance.


About Jason

Jason M Ruedy is The Home Loan Arranger - Denver mortgage broker and Colorado's top producing loan officer of residential loans, refinance, purchasing, conventional loans, FHA, and VA loans. For home loan information, visit The Home Loan Arranger or connect with Jason Ruedy on LinkedIn .

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