There are plenty of reasons someone would want to refinance their house. From taking out equity for a home improvement project to lowering their monthly payment, homeowners often have their reasons for choosing to refinance their mortgage. However, the time isn’t always right. At Mortgages By Jill, we can help you decide if the time is right for you to consider refinancing your mortgage in Greensboro. Read our guide below to learn a few situations when it would be a good idea for you.
If your current rate is above 4.10%.
Mortgage rates are relatively low at this time. While a rate of 4.10% isn’t something to turn your nose up at, you can do better these days if you have a strong credit rating. Depending on the length you’re looking for when refinancing, some homeowners can qualify for mortgage rates under 3.0%. Moreover, it’s not uncommon to find rates that are below 4.0%. Although, if you already have a rate below 4.10%, it’s not worth the cost to try to lower it a few tenths of a percentage.
If your credit score is at least 620.
The process of refinancing your mortgage is similar to getting your original mortgage and having a strong credit score as one of the requirements. The difference in the rate for which you get approved can be vast if your credit score is lower than 620. In fact, a financial institution might not even consider your application if your score is below that threshold. If your credit score needs some work, take time to bring it up because the financial difference will certainly be worth your while.
If you have a good debt-to-income ratio.
One of the determining factors for your credit score is your debt-to-income ratio. This is calculated by adding everything you pay for your monthly bills, which includes your mortgage, electrical bills, credit card payments, and everything else you pay. Take that number and divide it by your gross (before taxes) monthly income. Ideally, you should come out to be 36% or lower. This is a good number for lenders to see to determine that you can afford to refinance. Of course, one of the goals of refinancing is often lowering that number even more, so that’s something to keep in mind when approaching a lender or broker.
If you’re planning to stay for a while.
The process of refinancing your home is getting one lender to buy out your current mortgage and replace it with one that has a lower interest rate. Similar to when you buy your home, a lender isn’t likely to loan you the money you need if you’re not planning on sticking around for a while. For those who are planning to move within a few years, it’s best to stick it out with your current mortgage and wait until you get to your new home. If you’re in a home you want to stay in for another 10 or 15 years, then you’re a prime candidate for refinancing.
Call to refinance your mortgage.
If you’d like to learn more about mortgages in Greensboro and find out if you should refinance, get in touch with us at Mortgages By Jill. We can help you explore your options and evaluate whether refinancing is worth it for you right now or if you should wait. Schedule a meeting with Jill Burgess today by calling 336-740-9068 or send a message using our contact form. We’re available to take your call seven days a week.