Should you refinance before rates rise?

va-refinanceHome refinancing is a great option for people looking to lower their monthly payments, get money for home improvements, consolidate debt from high-interest credit cards, switch from an ARM to a fixed-rate mortgage, or even avoid foreclosure.

Have you thought about refinancing your home? Refinancing can save you a lot of money, but you need to know the facts before moving forward so you can make the best decision.

It’s important to know the current value of your home

In order to refinance your home there must be equity in the home unless you already have a VA loan and are refinancing into another VA loan.  If you do not have a VA loan and are looking to refinance into a VA loan then you will need at least 90% LTV. (i.e: Your current loan is for $200K and your property appraised for $230,000. This means that you can get a loan for $207,000 which equal 90% LTV. ($230K x 90% = $207000.00))

What is your current interest rate?

You want to make sure that the refinance makes sense for your situation. If your current interest rate is 7% and the rates the banks are offering is around 4.5%, it would definitely make sense to refinance for a lower interest rate.

What is your current credit score?

Credit scores play an important role in getting a new loan.  Credit scores show an underwriter how responsible you are. If you have late payments, and collection then you may not be able qualify for a new loan.

Underwriting guidelines have been very strict recently

You must be working or have a steady income each month and your income must make sense for the new loan.  The underwriters will request paystubs, w2’s, tax returns, etc to verify the information.  Unemployment is not allowed and is not considered as stable income.

What are the closing costs going to be?

Does it make sense for your situation? There are escrow and lender fees that are charged when doing a refinance. These fees can be paid paid with cash or rolled into the loan if you have equity. There are many options available. Give us a call to discuss all of them. Call the front desk at 888-573-4496.

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