If you are thinking about refinancing your home, there are a few things that you should know before making the decision to do so. Refinancing might not be the solution for everyone, but it is still worth looking in to. Here is a list of what you should know before going for mortgage refinancing in Ohio.
- Don’t refinance if you plan to sell your home in the near future. However, if you plan on retiring in the home, it may be a good idea to refinance.
- If you bought the property when rates were higher than they are now, it is a good decision to refinance your mortgage.
- If you are looking to refinance your mortgage in Ohio, start with your current mortgage lender before looking elsewhere. Your current lender might have a better deal than what you currently have.
- Shop around and compare several loan types and mortgage loans. The key to finding a good mortgage deal is to shop around and learn about the options that are available to you. Don’t take the first offer until you have done your homework first.
- If you currently have an adjustable rate loan (ARM), it's a good time to think about switching over to a fixed-rate loan. Adjustable-rate loans will fluctuate, whereas fixed-rate loans stay the same throughout the life of the loan or when you refinance.
- A few good reasons to refinance include obtaining a lower interest rate, lowering your monthly payments, shortening your loan term to build equity faster or changing over from an adjustable-rate mortgage to a fixed-rate loan.
- Learn about the cost of refinancing your loan. Refinancing your mortgage can cost around 3 percent of the total loan amount, so you want to make sure that it is something that you can afford.
- Determine if refinancing your mortgage is worth it. If you are not going to save money refinancing your Ohio mortgage, it is not a wise decision to refinance. Your break-even point can be determined by calculating your mortgage fees, including prepayment penalties, by your monthly savings, this will let you know if you will be saving money if you refinance. Consult an Ohio mortgage broker or use a mortgage calculator to help.
- Make sure your credit rating is in order. Get a copy of your credit report from the three major credit reporting agencies and check your credit. To get a good mortgage deal, lenders will require a satisfactory credit score. There are mortgage programs available to help people with bad credit, but you will have to pay higher rates or surcharge. With that in mind, it may not make sense to refinance at this time. Work on building your credit rating up to a decent point before looking into refinancing.
So should you refinance? Use this information to learn about what you should know before going for mortgage refinancing in Ohio.