Is Now The Ideal Time To Refinance Your Home Mortgage?
A Refinance is basically when a borrower replaces an existing loan with a new one. This is often done to get a lower rate, switch from one loan type to another, or to convert equity to cash. Knowing when is the right time to refinance your mortgage will depend on your individual circumstances. There are several aspects to consider prior to refinancing and you should be sure to give adequate consideration to each.
Some Factors To Consider:
Closing Costs
Pre-Payment Penalty
Be sure to ask your lender if you will have to pay a pre-payment penalty to get out of your exisiting loan.
If so, add the pre-payment penalty expense to the closing costs in order to determine the overall cost of your refinance.
Your existing loan documents should specify pre-payment penalty details.
- If you are not sure if a pre-payment penalty applies to your loan, we'd be glad to take a look at your loan documents or you may refer to your lender's 1-800 customer service hotline.
How Long do you Plan to Stay In Your Loan?
You must consider how longer you plan on living in your home.
Ensure that the length of time you expect to stay in your home will allow ample time to recoup the costs of the refinance if you are refinancing to obtain a lower rate.
Current Rates Vs. Your Rate
Below are the current average rates in California. This is only an estimate but and is meant to provide you with an industry average.