Refinancing your mortgage can be good or bad depending on your situation. You can save money in some cases with a mortgage refinance, but you can also lose money.
If you currently have an adjustable-rate mortgage that has continued to increase, you should start considering changing your loan to one with a fixed mortgage rate.
Or, if you bought your home at a high interest rate due to a poor credit rating, a refinance could lower your interest rate and save you lots of money. Are there dirty secrets of mortgage refinancing in Maryland? Let’s see.
Refinancing in Maryland
Mortgage rates are low right now, so refinancing may make sense for some homeowners, but not for everyone. Don’t be tricked into thinking that refinancing is good no matter what the situation is. But how do you know if refinancing is good for you? Consider these reasons to refinance your mortgage:
- To lower your monthly mortgage payments
- Secure a lower interest rate
- Consolidate bills
- Pay off high interest debts
- Home renovations
- Pay for a child’s college education
- Pay for medical expenses
Will I Save Money With Mortgage Refinance?
HYes and no. If you plan to stay in your home for a long time or you will make up your closing costs and other costs associated with a mortgage refinance, within two years, you could save money.
However, if you intend to sell your home within two years, refinancing does not make sense. Also, if you bought your home at high interest rates and can secure a lower rate, you might be able to save money and also reduce your monthly mortgage payment.
How Much Can Refinancing Cost?
To refinance your home, it could cost you anywhere from 2 to 3 percent of your loan. However, refinancing costs will vary from one person to the next depending on many factors like closing costs amount, loan value, amount of discount points, or any fees associated with the loan.
Some lenders may be willing to waive some fees or pay a part of a portion of the closing costs. This can help to cut back on refinancing expenses. Always read the fine print and familiarize yourself with refinancing procedures and the dirty secrets of mortgage refinancing in Maryland.
Refinancing a Maryland Mortgage With Bad Credit
Make sure your credit rating is satisfactory before approaching a mortgage lender in Maryland.To secure the best mortgage deals, you will need to have good credit or you will end up with very high interest rates and undesirable terms.
Don’t be tricked into thinking that you will get a competitive rate with a bad credit score. Keep in mind that though bad credit mortgage refinancing programs are available and you may qualify for one, you will not get the same interest or terms as someone with excellent credit.
It might not make sense to refinance with bad credit. This might also be one of the dirty secrets of mortgage refinancing in Maryland.