Refinancing Your Home
As a homeowner, it’s a good idea to keep your eye on mortgage interest rates and your home equity over time. That’s because, as the market fluctuates and mortgage rates fall below your original rate, you could save money by refinancing your home. Alternatively, when rates are down below the rate you’re paying, you could also refinance to lower your monthly payment.
Another good time to refinance is when your equity gets close to 20 percent, when you could remove any monthly mortgage insurance you may be paying. Homeowners in the Cumberland, MD area and local communities in WV and PA should keep their eyes open for a good opportunity to refinance.
What Is Mortgage Refinancing?
When you refinance your home mortgage, you are essentially applying for a new loan, also known as a second mortgage. When you’re approved for the second mortgage, it is used to pay off your original home loan (your first mortgage). Since you’re getting a new home loan, you’ll need to go through the application process, provide proof of income, credit score, and assets. You’ll also typically need an appraisal of the home’s current value, allowing your bank or mortgage company to decide how much they’re able to lend.
Why Refinance? Home Refinancing Benefits
By refinancing your home at the right time, you can get a lower mortgage rate. If you have an ARM (adjustable-rate mortgage) currently, you might like to refinance to a fixed rate with a predictable monthly house payment. If you have a first and second mortgage already, you could refinance to consolidate them into a single home loan, with just one mortgage payment instead of two per month.
You may also need to refinance to remove PMI (private mortgage insurance) for an FHA loan, because it is not removed automatically when you reach 18 – 20 percent equity (as some home loans do). Each of these refinancing strategies could save you money if done at the right time. Or you could take cash out of your home…
This popular type of refinancing allows you to tap into the equity your home has built up over time, and get cash to use for other priorities. Your payments have helped you gain equity in your house, along with perhaps some home improvement projects—and real estate market conditions also have a role. If your home’s value exceeds the amount you still owe on your current mortgage, you could get cash out.
Do the Math Before You Refinance
Refinancing your home mortgage does require you to pay a fee, which you should calculate in with the prevailing interest rate that you’ll be offered on your new mortgage. Factoring in these variables helps you determine if it’s a good, worthwhile time to refinance your home loan.
Learn More About Refinancing Your Mortgage
If you’re thinking about refinancing your home, the experts at Homespire Mortgage are ready to assist you. We can help you evaluate the timing and how you might benefit from mortgage refinancing. Our goal is to make the application process stress-free and easy for you. We serve the local areas of Frostburg, MD, Cumberland, MD, Lonaconing, MD, and Westernport, MD from our headquarters in Cumberland. In WV, we provide mortgages in Short Gap and Keyser, and in PA we serve the Bedford areas.