You Might Be a Refinancer If…

Refinancing can sound like a scary and complicated term. If you’ve ever looked into refinancing, you’ve probably realized that the lower mortgage rate you have your eye on is anything but easy to achieve. But it’s true when they say that nothing worth having comes easy and refinancing is just one of those things. So if you’ve been searching for someone to help you with your Discovery Bay refinancing, take a second and think about whether refinancing is the best, most logical solution for you. You should really consider refinancing if…

  • Your income and credit score are low, but they aren’t changing too much.  If your credit has taken a hard hit or you find yourself struggling because of unemployment, it may be difficult for you to refinance your home. A credit score of 620 is usually necessary to make refinancing a feasible option for you, and you’ll have to be able to prove that your income level has stayed relatively stable for an extended period of time. This basically means that while refinancing may be able to help you get a better mortgage rate and save money, it’s not much of an option for those who are on their last leg. In situations like this, it’s better to sit down with a financial adviser and make a solid plan for you and your family.
  • You can afford the refinancing fees. The process to refinance isn’t free. On average, borrowers end up paying roughly 2% of the new loan, which can get pretty pricey. You’ll have to pay fees for the application, getting your house appraised, and also getting your house inspected. 2% sounds like a low number, but when you start considering a $300,000 mortgage, those fees add up in a hurry. Also be sure to check out your original paperwork. If you bought the house with a prepayment-penalty, it may not be worth it to refinance your home as you’ll end up paying somewhere between 1% to 3% of the balance left on your mortgage. Talking with a refinancer about these fees may be able to clear up any misunderstandings you have.
  • Your break-even point is something you can deal with. Your break-even point includes what it costs to refinance your home divided by the savings you’ll see every month. This will tell you how long it will take for you to break even and truly see the difference that refinancing made. Not every break-even point is easy to calculate when you start talking fixed or adjustable interest rates, loan terms or what insurance you may be required to have. But it should give you something to start with to decide if refinancing could be your answer.

Before you decide if refinancing sounds like a good idea or a bad one, talk to a professional and see how they may be able to help. All of these numbers can get confusing when thrown together so find a Discovery Bay refinancing office that will be able to make sense of it all for you.