Switching Terms with a Refinance

Feb 18
Category | Blog

Although rates are always changing, as of right now, they have quietly fallen over the past few months. Many people have waited for them to drop before considering a refinance, but now might be to the time to check with your loan officer to get a rate update. Sometimes, a refinance can even make sense if you’re switching from a longer term mortgage to a shorter one.

In order to change the terms of your mortgage, you have to refinance. Refinancing is when another lender agrees to buy out your existing mortgage with a new one that has new terms. In order to determine whether refinancing is the right thing for you and your situation, you should consider the following factors first…

What New Terms Can You Get?

How do the new terms differ from your current terms? The difference in rates is obviously a large factor, but you also want to consider duration, loan type, prepayment penalties, and more.

How Much Will You Save?

When you stack up your current terms against the potential new mortgage, how much would you really end up saving by refinancing? Make sure you work out the numbers with your loan officer, and don’t forget to account for the closing costs of a refinance mortgage.

Follow The Mortgage Rate Projection

Will interest rates continue to go down? Have they reached a standstill? You might want to move quickly and make sure you can lock the rate with your mortgage lender.

Your Ultimate Goal

When deciding whether or not to refinance, the most important thing you need to consider is your overall financial goal. Is this the right time for you and your current situation? Will refinancing help you obtain your goals?

Overall, the best thing to do when considering refinancing your mortgage, is to speak with your loan officer. They will be able to help guide you in the right direction based upon your current situation and future goals. If you have any questions, inquiries, or concerns, you can contact one of our loan officers today to help you.