Refinancing Considerations

Despite the fact that mortgage rates have increased, a refinance may still make sense for you. Don’t wait too long to explore this option! The general current trend for mortgage rates is expected to move upward.  In the past several years, we have seen 30-year fixed mortgage rates hit all-time lows, hovering in the mid 3% range. Since the Presidential election, rates have bounced up to the low-mid 4% range.

As a rule of thumb, if you can reduce your mortgage rate by at least 1%, then a refinance may make sense.  For example, if your current 30-year fixed rate loan is at 5.6%, then refinancing to a rate closer to 4.37% will save you approximately $120 month for every $100,000 you borrow. 

It’s important to keep in mind that while that is great savings, a refinance loan does come with some closing costs.  While closing costs can usually be included in your loan, you will still want to calculate a “break even” period.  In other words, how long does it take at the monthly savings for you to recoup the costs involved?  At Rogue, our experienced team of local Mortgage Loan Officers are here to help you figure that out. 

Besides interest rate savings, you may be thinking of other reasons to consider refinancing. Perhaps you’d like to use some equity for home improvements or paying of credit card debt.  Most of the regions we serve have experienced some upward movement in home value and refinancing for “cash out” may be a viable option.   Perhaps you have an adjustable rate loan, and with all the talk of interest rates starting to move higher, now could be the time to look at transitioning to a low, fixed rate loan.  Lower interest rates, getting cash out for home improvements or to consolidate bills, and paying off your adjustable rate for a fixed rate loan are all reasons to explore your refinance options.  

Once you have decided to explore refinancing your home, you will find that there are a variety of different loan options out there to choose from. Most folks have a conventional loan, meaning you probably put 10% to 20% down when you purchased your house.  For our Veterans, many of you will have a VA loan, which offers a simplified refinance process called an Interest Rate Reduction Refinance Loan (IRRRL).If you purchased with an FHA loan, you may also have a streamlined refinance option available that can save time in the refinance process.

Due to increased regulation, today’s mortgage world and the loan process can seem very complicated. If you’re considering refinancing your home, or are overwhelmed by the idea, we’re here to help! Give us a call to schedule a time to meet with one of our experienced Mortgage Loan Officers, and we’ll review your options and help you decide whether or not a refinance makes sense for your unique situation. Our Mortgage Loan Officers will help guide you through the process and help bring that refinance loan (or a home purchase loan, if you’re looking for something new) to the best conclusion possible.