Should I Refinance My Home Loan?
Refinancing their home loans can save borrowers a lot of money by reducing interest rates, loan terms or both. Outdated mortgage wisdom used to be that one should only refinance their home loan if they can reduce their interest rate by two points. These days, because interest rates are so low, in some cases it can be advantageous to refinance a home loan for as little as a half of a point. Borrowers asking the question should I refinance should consider the following three things:
1. How Much Will it Reduce My Interest Rate?
This is important. A lowered interest rate can reduce monthly payments substantially each month as well as over the life of the loan.
2. How Much Are Closing Costs?
When considering a refinance, it is important for potential borrowers to consider closing costs in addition to the question of “should I refinance?” Closing costs vary by lender and borrowers may also have the option of paying points (1% of the value of the loan) in order to reduce their interest rates. In addition there may be attorneys, appraisal, home inspection and other additional fees tacked onto the closing costs.
3. How Long Am I Going to Be Living in My Home?
The real key is the break-even point. That is the number of months the borrower plans to keep the home after refinancing in order to recover closing costs. If a borrower spends $3,000 on closing costs and saves $150 a month by refinancing it will take them 20 months to actually make the refinance profitable. If this borrower only had a year left on their loan, they would lose money by refinancing.
When Should I Refinance?
Given the fact that interest rates are consistently in a state of flux, it can be difficult to determine when should I refinance. That’s why Crestline Funding offers a Rate Watch Program that sends borrowers real-time alerts when interest rates have dropped to the point where it is advantageous to refinance.
Why Should I Refinance with Crestline Funding?
As a direct lender, Crestline Funding originates loans with its own money. This allows Crestline Funding to offer lower interest rates than its competitors. Crestline Funding saves money by not having to pay middle men and broker’s fees allowing Crestline Funding to pass the savings to its borrowers. Borrowers asking should I refinance even if I have a blemished credit history should come to Crestline Funding because Crestline Funding will work with people regardless of their credit history.
Ready to save money by taking advantage of Crestline’s low interest rates? Simply fill out the online form below or call 800.998.FUND and Crestline Funding’s friendly, knowledgeable staff will be back to you in as little as 20 minutes with your prequalification results.
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