Questions to ask about whether a mortgage refinance is viable
With interest rates being extremely low at the moment, many homeowners are starting to talk about the value of refinancing their mortgages. This can be extremely cost effective, as you could be able to negotiate a new mortgage with reduced interest rates, and thus pay less on a monthly basis. On the other hand, you might be able to reduce the term of your mortgage but not pay much more per month because of the reduced interest rate. If you pay your mortgage off in a shorter time, you can save thousands of dollars in interest charges. However, although a mortgage refinance may sound like an excellent idea, it’s not always possible, and it might not even be in your best interests.
Questions to ask about possible refinance mortgage rates in Maryville
For a start, it might not be easy to get a loan, so you would first need to find a bank that was willing to help you with a refinance. Once you found someone willing to take over your mortgage on different terms, you’d need to decide whether this made sense financially. This would be particularly true for people who are planning to sell their homes within a short time period.
To qualify for a new loan, you might need to pay private mortgage insurance unless you have at least 20 percent equity in your home. If you have to add this cost to a new mortgage, this could negate the benefits that would otherwise apply. There are still programs that will accept you with less equity, but you’ll need to approach a lender to see if you qualify. In other situations, some homeowners are choosing to bring cash to the settlement so that they can pay down their mortgage balance and qualify for a refinance.
Is your credit good enough?
As you are probably aware, your credit scores will play a big part in getting a good mortgage rate, or even to qualify for a new mortgage. With a really good credit score, you can qualify for the lowest mortgage rates but, unfortunately, the opposite also applies. The bottom line is that you need to consult with experts and discuss your particular situation. Looking for more information and insight? Visit your community bank in Maryville TN to seek the professional advice of a mortgage lender.