Why Refinancing Will Benefit Me ?
Are you thinking of refinancing your current mortgage? There are closing costs involved if you are thinking of refinancing your current home mortgage loan. The right rule of thumb is if you are planning on staying in your home for 2 or more years and can drop your current mortgage rates by 1.5% or more, refinancing can be of great benefit to you. However, if you are planning on selling your home in the very near future, you need to consider whether or not refinancing is cost effective. There are many other reasons that refinancing might benefit you and save you thousands of dollars.
Converting a FHA mortgage loan to a Conventional mortgage loan
If you have a current FHA mortgage loan and you have at least 20% or more equity in your home, you might want to refinance your current FHA mortgage loan to a Conventional mortgage loan so you do not have to pay the monthly mortgage insurance premium. FHA mortgage insurance premium is 1.35% of the mortgage loan amount and that can cost you several thousand dollars per year. By refinancing to a conventional mortgage loan without mortgage insurance premium, you will save thousands of dollars and even if the conventional mortgage loan has a higher mortgage rate, it might be cost effective for you. Have a mortgage broker/banker do a cost savings analysis for you. It does not cost you anything and can be done in a matter of minutes.
Check your credit report for any errors and try to maximize your credit scores
A low credit score yields higher mortgage rates and less favorable terms. If you are thinking of refinancing your current mortgage, make sure you get a copy of your credit report and look for any errors that might be dragging your credit scores down. If you see any errors, dispute them to the three credit reporting agencies and get them deleted. If you had prior bad credit, reestablish your credit by doing a credit analysis. Your mortgage broker or mortgage banker can give you advise on how to improve your credit scores. If you recently have damaged your credit scores by being late on some payments, you might have to wait a few months until your credit scores improve.
Need help in improving your credit?
If you are looking to refinancing your home in California, Illinois or Florida and need help improving your credit, contact me at 262-716-8151 or email me at firstname.lastname@example.org. You can also visit me and subscribe to our mortgage and real estate daily newsletter at www.gustancho.com and I can assist you at no cost or obligation. I am available 7 days a week.