Should I Refinance?

What a year it has been.

As we turn into the new year, many clients ask me to refinance their homes.  The first thing I ask them is, “What is your goal?  Are you looking to lower your rate, lower your payment, cash out, or all of the above?”

Values have been increasing as high as the mid 2000s,  and now, more and more homeowners have equity to use to pay off their bills, do home improvements, etc.

Now with that being said, are you a homeowner with the same question…do I need to refinance?   The first thing to ask yourself is do you have an FHA loan or a Conventional loan?  If you have a FHA loan, chances are you are stuck with that mortgage insurance and would like to get rid of the mortgage insurance.  That is a good reason to, but there is more to that.  If you have a rate is the 3%-3.5%, is it worth refinancing to get rid of your mortgage insurance?  Well, maybe.

If you are trying to refinance your way out of the FHA mortgage insurance, here are some tips to consider before you do:

1. What are today’s conventional rates and compare your new monthly payment to your current one.  Feel free to use our mortgage app to do some calculations.
2. How is your credit is score?  Chances are you have made purchases after your closing and/or opened up new credit accounts so make sure your credit is acceptable to conventional standards.
3. What is the value of your home?  You may search online to obtain a value, but the best way is to hire an appraiser and have a full custom report of your property.

If you have a conventional loan, then here are some questions you may ask:

1. Will I receive a better rate?
2. Will I lower my total monthly payments?
3. Do I need cash now for a home improvement, family emergency, etc.

I always recommend to stay away from your home equity to buy luxury items.  By “luxury”, I mean things you really don’t need.

Once you have these questions answered, you will be able to make the best decision on moving forward.

If you have any questions, please call us now….(407) 930-4490 and we can advise on your next step.


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