Mortgage and Home Loan Refinance in Green Bay, Wisconsin
Refinancing a mortgage or home loan is a really common practice and people choose to refinance for a variety of reasons. Below are some considerations when thinking about refinancing your mortgage.
Reasons to Refinance Your Mortgage
- A common reason for refinancing your mortgage is when loan rates or conditions are more favorable than when you last originated your mortgage. For example the interest rates may have dropped and refinancing could save money on your monthly payments. Mortgage interest rates change day to day based on a variety of factors. Or perhaps you are refinancing from an ARM loan to a conventional fixed rate loan.
- Another reason to refinance your mortgage is because you have equity in your house and want to take cash out through refinancing. This can be a good option if you want cash in order to complete home improvements or for other life events.
- Others may choose to refinance their mortgages in order to shorten their mortgage term. Some people prefer a 15 year mortgage as opposed to a 30 year mortgage. In addition to having a mortgage payment for a shorter period of time it also saves on total interest costs over the life of the loan. A shorter mortgage term usually also coincides with a lower interest rate which is also a money saver. A downside of a shorter mortgage term is the higher monthly payment that is typically associated with a shorter term.
What to Consider Before Refinancing
- Credit scores always have an impact on home loans and mortgages. Typically the higher credit score you have the lower interest rate you will have for you loan. Credit score also impacts the type of mortgages you are eligible for.
- The amount of your monthly mortgage payment and how much you can afford is of great importance when considering your refinancing options. When you refinance you monthly payment is likely to change and knowing what you can and want to afford is an important consideration.
- Home values change over time and knowing the value of your home is an important step in the refinancing process especially if you want to take cash out of your home. It’s also important to note that your loan can’t be larger than the value of your home. An appraisal is usually part of the refinance process so the value of your home can impact your ability to refinance.
- Debt to income ratio (also known as DTI) impacts mortgages and refinancing as well so it is important to evaluate your current debt levels. Your debt to income ratio is exactly how it sounds; it is the total of your monthly payments on all the debt you have divided by your grow monthly income. The majority of lenders require your debt to income ratio to be below 50%.
Contact Executive Mortgage About Refinancing
If you want to explore how refinancing could benefit you contact us here at Executive Mortgage at 920-490-8823. The loan officers at Executive Mortgage are experienced with a variety of refinancing options and terms and can find the best mortgage product for you and your situation.