With interest rates at historically low rates, a number of homeowners are considering options to refinance. Many individuals who have found themselves in this group have turned to Hunter Financial Groupfor assistance. Their loan specialists have the knowledge and expertise to help clients find the best rates available.
Lower interest rates are not the only reason to consider refinancing. Homeowners opt to pursue refinancing for any number of reasons. The most popular include:
- Building equity with a short-term mortgage
- Moving from an adjustable-rate to a fixed-rate mortgage
- Drawing on equity to fund major expenses (college tuition)
Hunter Financial Group explains the equity in a home or property dictates whether it is eligible for refinancing. For example, individuals who purchase homes at peak prices might find equity lacking when the overall market declines. In these instances, homeowners must make a new down payment to refinance at a lower interest rate.
This process may sound similar to the initial steps taken to secure a home loan. Just like that process, lenders are not obligated to provide an estimate of closing costs. Before electing to proceed with refinancing, take care to request a good faith estimate of these costs.
Just as realizing a home does not have enough equity to justify refinancing, the amount required to close might negate the savings a lower interest rate would otherwise provide. Lenders who offer refinancing at no cost typically make up this amount with a higher interest rate.
Hunter Financial Group: Does it Pay to Refinance?
Hunter Financial Group encourages customers to answer a few simple questions to understand if refinancing is the right choice. First, homeowners should subtract the monthly payment amount available through refinancing from the current mortgage payment. This is the monthly savings amount.
Next, identify the cost to refinance. Keep in mind, the total cost to refinance typically includes mortgage points and other administrative loan fees like title searches and appraisals. The last step is to divide the total cost by the monthly savings. The resultant number is how many months one must stay in the home to break even before realizing an overall financial gain.
When considering refinancing, Hunter Financial Group suggests homeowners consider a standard industry measure. When interest rates drop by two percentage points, it is time to refinance. Hunter Financial Grouplooks forward to helping customers with refinancing options tailored to their specific needs. To learn more about how the loan specialists at Hunter Financial Group can provide assistance, please take a moment to visit the company’s corporate website.
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