12 Feb When Should YOU Refinance Your Home?
The boxes have been unpacked for some time, the new lawn is coming in nicely, and you’re contemplating a different color for the kitchen walls.
- Interest rate | Taking advantage of lower interest rates can reduce your monthly payments.
- Fixed or adjustable rate conversion | This depends on your relocation plans. If the rates are good and you’re planning to stay in the home long-term, it can be wise to switch from an ARM (adjustable rate mortgage) to a fixed rate. Conversely, you can switch from your fixed term to a lower ARM program when you plan to sell in the next few years before rates rise.
- Home equity | Our current housing market remains strong which means home values are rising in many regions around the country. Tapping this equity can be a great way to borrow from the home through a cash-out refinance.
- Credit score | Buying your home through FHA when your down payment was low or your FICO was below average can be a tremendous opportunity, but it can also come with higher rates and required mortgage insurance costs. When your credit standing improves, you can knock that monthly payment down through refinancing.
- Income | As with the credit score, an upward change in your income status can be a natural avenue into a new mortgage and a lower payment.