Kennedy Real Estate Solutions
Kevin and Sharon Kennedy, Kennedy Real Estate SolutionsPhone: (860) 304-4433
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Things to Consider When Refinancing Your Mortgage

by Kevin and Sharon Kennedy 10/02/2019

The Mortgage Bankers Association (MBA) refers to mortgage refinancing as a crucial aspect of all mortgages. This is partly because comparatively, low mortgage interest rates have encouraged homeowners to restructure their financial situations using their home equity. Homeowners should base their refinancing decision on their circumstances rather than mortgage interest rates. Here are tips to consider when considering refinancing your mortgage: 

Home Equity

You need to have home equity before you can even consider refinancing your home mortgage. Home values are steadily rising which means that with conventional lenders, you can have enough equity to get a loan. Most lenders will allow a homeowner with at least 20% equity to get credit quickly.

Credit Score 

In recent years, lenders have made the requirement for loan approval stricter. Therefore, some consumers with good credit may not qualify for the lowest interest rates. Typically, the acceptable credit score by most lenders is 760 and above. Borrowers whose credit scores are not up to the satisfactory score may still obtain a new loan but with higher fees or interest rates.

Refinancing Cost

Refinancing costs usually take between three to five percent of the loan amount. Borrowers can look for ways to reduce this cost or incorporate it into the loan. The cost can also be rolled into a new loan if you have enough equity. With some lenders, you are likely to pay an interest rate that is slightly higher to balance the closing cost when you take a loan with them. Make sure that you negotiate and ask several lenders so that you get the best fees for your refinancing loan.

Rates vs. Term 

A borrower needs to have a goal when refinancing to know the exact mortgage product that is most favorable. If all you want is to reduce your monthly payment to the minimum, a loan with a long-term interest rate will be beneficial. If your goal is to pay a reduced interest rate over a short period, you should consider the lowest interest rate in the shortest term. 

Break-Even Point

Before deciding to refinance your mortgage, determine the break-even point. The break-even point is the time at which your monthly savings have covered your refinancing cost. Beyond this point, your monthly savings belong to you. This also means you know how long it will take before your refinancing makes sense if you intend to sell or move from the home in some years.

Mortgage refinancing can be quite confusing, so you need to be sure you completely understand the terms and conditions. Do your research and also speak to a financial planner to give you professional advice.

About the Author
Author

Kevin and Sharon Kennedy

"A Personalized Approach to all your Real Estate Needs" Sharon and Kevin Kennedy have built Kennedy Real Estate Solutions with the premise of building relationships and finding creative solutions to unique real estate situations, both residential and commercial. The Kennedy’s work with their clients with the intent of getting a full understanding of the client’s current situation and desired real estate goals. With this understanding and the knowledge that has been acquired from over 50-years of real estate experience, Sharon and Kevin offer guidance and advice best suited for the individual client. Buying and selling a home can be an emotional and trying time for most folks. The Kennedy’s are sensitive to their client’s needs in this ever changing real estate environment. They are with them every step of the way and will help to address whatever challenges arise. About Kevin J Kennedy, Broker/Owner Kevin J. Kennedy is a dedicated and successful Realtor/ Broker. He helps his clients buy and sell homes throughout the beautiful Lower Connecticut River Valley and Connecticut Shoreline. Since buying or selling a home is a major life event for most people, both financially and emotionally, it is important to have an agent you can trust and with whom you feel comfortable. An essential part in creating a great real estate experience is choosing an agent who is detail-oriented, has up-to-date market knowledge, and is a skilled negotiator. Kevin offers all of these qualities. Today, many buyers and sellers insist on the advantages of cutting edge technology. Via his web site and IDX property finder, Kevin delivers. Using these state-of-the-art tools, his buyers save time and energy during the house-hunting process, and his sellers are able to reach numerous prospective buyers. Kevin is highly regarded in the real estate community and is a consistent top producer. He lives in Old Saybrook, is an instructor of T'ai Chi and QiGong, and enjoys photography, music, and kayaking. Call Kevin at 860-304-4433 About Sharon S. Kennedy, Realtor Sharon grew up in Old Saybrook. Her family owned and operated one of the first local real estate companies. She first received her real estate license in 1988 and now has more than 35 years of real estate negotiation experience. Sharon enjoys gardening, spending time with her horses, chickens, cats and dog along with preparing wonderful vegetarian meals for her family. She is knowledgeable in homeopathy and natural remedies. Today many buyers and sellers insist on the advantages of cutting edge technologies, Via their web site and IDX property finder, Kevin and Sharon provide state-of-the-art tools. Contact them today to discuss your real estate needs.