Should You Refinance Your Home?
When you refinance your home, a new loan will replace your current one. You might do that to:
Get a lower interest rate Combine your bills or pay them off completely Get money for home improvements or repairs What you must consider before refinancing Refinancing to get a lower interest rate will probably save you money if:
The new loan’s interest rate is at least 2% lower than your old one, and if you will stay in your house for three years so. If you refinance to consolidate bills and pay off debts, your total monthly payments may be less than what you pay now. But you should know that the monthly mortgage payment will be higher. Know that if you are unable to pay for your monthly mortgage payment, your home can be taken away from you.
If you just need the cash for home repairs, you can qualify for a low interest government plan.
How will I find a lender? Banks, mortgage companies and credit unions are the most common lenders. Here are a few tips for finding lenders.
Contact three lenders, or more if you can. Ask for a loan that has the lowest interest rate, points, and fees. Be sure the lender is licensed and in good standing. Mortgage loan brokers work with lenders to assist you in finding a loan. To be sure that they are licensed with the Department of Real Estate, call the local office. How much will refinancing cost? Lenders usually have different loan charges. Loan charges include points and fees. A point is equal to a percent of the loan, and it will be paid to the lender or the broker. Be sure to shop around and negotiate for the lowest interest rate, points and fees.
What are included in the loan fees? Here are the things included in loan costs:
The Assessment Recording The Title
The Escrow Credit Report Document Notarization
Wire Services Messenger Services The Documents
Loan Origination
Do I have a right to cancel? Yes, you can. From the time you sign the loan papers, you have 3 business days to cancel. If you will cancel, your credit report and appraisal fees will not be refunded. And if you are refinancing a rental property, you cannot cancel.
Pre-signing Review all the loan documents carefully. In the Truth In Lending Disclosure, you’ll find the basic terms and conditions of the loan. The Settlement or Closing Statement is where you’ll find the fees that are charged to you and what accounts are being paid off. Make sure that the loan documents show everything that you were promised. If there are things that you don’t understand, don’t sign just yet. You should ask for an explanation.
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