Before you refinance
Is your kitchen in desperate need of a major update? Is your child approaching college-age and you are looking for some extra money? Or are you just looking to loosen your financial belt a little bit every month? You may be thinking of refinancing your home to save money or to make home improvements. Before you begin contacting lenders there are few steps that you should take in order to prepare for a refinance.
Check your credit
Your credit score will be one of the main factors in determining how much money you are able to borrow and at what interest rates you can get. If you don't know your credit score you should find out. To find out your actual credit score you may have to spend a little bit of money however it will be worth it in the long run. There are places available where you can get a free credit report which will also help you in determining if you are able to refinance.
Run the numbers
Refinancing might be the answer to several of your issues however you need to determine if it is actually possible. You need to consider the long-term loan and your future retirement and age. You may not want to take on a 30 year loan if you are much less than that a way from retirement. A 15 year mortgage might be a better option. One of the things that you can use to help you is an online refinancing calculator before you decide if refinancing is right for you.
Your home’s value
Knowing your home’s current market value will be helpful in the refinancing process. Do some research on recent sales in your area and comparable homes. This will give you a rough estimate of how much your home is worth. Once you have the estimated value you should compare that with how much you currently owe on the home. Most lenders like to see that you owe less than 80% of your home’s current market value.
An important piece of securing the loan is being able to pay it off and make monthly payments. If you have high balances on your credit cards and you're getting close to your credit limits you should attempt to pay them down prior to getting a review prior to refinancing. High balances will only lead you to higher interest rates when applying for loans. Also paying your bills on time and keeping lower balances will show the lender that you are a reliable client.
Research Mortgage Lenders
A good place to start is with your current lender. It is important for lenders to keep your business so they may be more willing to work with you to lower your interest rates. However there are many lenders out there who have varieties of options. Do a little research and seek out comparable rates from several different lenders so that you can be assured that you are getting the best possible contract.
When you are ready to refinance, call Florida Real Estate Lending. Our professional mortgage brokers will work with you and provide you with many options for your refinancing needs.