Buying a house is a difficult, tough process - but, you made it through! Now, perhaps just a few years later, you’re ready to refinance your mortgage. You may be surprised to find that it’s a lengthier process than just a few emails and phone calls. In fact, there may be more paperwork involved this time around than when you first bought your home. USA Mortgage wants you to be prepared for what’s to come in the refinance process. The first step of the process is figuring out why you might want to refinance.
Just to clarify, refinancing is the process of obtaining a new mortgage in an effort to reduce monthly payments, lower your interest rates, take cash out of your home for large purchases, or change mortgage companies. Most people refinance when they have equity on their home, which is the difference between the amount owed to the mortgage company and the worth of the home.
Refinancing is ultimately done to allow you, the borrower, to obtain a better interest term and rate. The first loan is paid off, allowing the second loan to be created, instead of simply making a new mortgage and throwing out the original. For borrowers with an ideal credit history, refinancing can be a good way to convert a variable loan rate to a fixed, and obtain a lower interest rate. Borrowers with less than perfect credit or too much debt, may find that refinancing can be risky.
In any economic climate, it can be difficult to make the payments on a home mortgage. Between possible high interest rates and an unstable economy, making mortgage payments may become tougher than you expected. Should you find yourself in this situation, it might be time to consider refinancing!
Feel free to reach out to any of our loan officers if you’re ready to move forward with the refinancing process!