If you haven’t heard it on the radio or read about it in the news, maybe your mortgage banker has already reached out to you about it – historically low interest rates are here now and no guarantee they’re here to stay. That being said, the decision to refinance your home loan has probably come to mind.But should you?
Realtor.com’s Daniel Bortz writes of signs that show you should go for the refinance.
Bortz cites the rule of thumb that states if your interest rate is more than 100 basis points (1 percent) above current rates, refinancing is a logical move. Check out a refi-calculator online to explore how much money can be saved with just one percent to better determine whether it could be worth it to refi and can save you a decent chunk of cash over the life of your loan.
That pesky PMI
Refinancing, once you’ve got at least 20% equity in your home, can help you drop your mortgage insurance if you didn’t have enough down payment when you purchase your house.
You’re at home – for now
If your short-term plan is to move, then maybe refinancing isn’t for you, but because refinancing costs money (3% to 6% the amount of your loan, according to the article) you should plan to stay in your house long enough to make it worth the cost.
For more tell-tale signs of when it’s a good time for you to refinance, check out Bortz’s article here.
If the refinance process makes you nervous - don't be. We have a guide that details the steps you'll take with your SMC Mortgage Banker for a smooth refinance!