What to Know About the Refinance Process

What to Know About the Refinance Process

What to Know About the Refinance Process

Do you know how to determine if refinancing your home loan is right for you? The refinance process may seem complicated, but once you know the basics, it’s all smooth sailing. 

If you are looking to refinance your mortgage, it is important that you know the entire process–the gestalt of it all. Refinancing a mortgage can potentially save a homeowner a substantial amount of money over the entire life of the loan. But if you are going to consider refinancing, you must remember to consider all of the upfront costs that come with this process. Here are some of the reasons you may choose to refinance.

Short-Term Loan

If you are able to afford a higher monthly payment, switching from a long-term, thirty-year loan, for example, to a short-term, fifteen-year loan is very beneficial. The monthly payments will be higher, but you would pay off the loan quicker and save thousands of dollars in interest over the life of the loan.

Decrease Your Monthly Payment

If the current interest rate is lower than the rate you pay for your mortgage, then a refinance may lower your monthly payment by lowering the interest rate for your home. It is important to note that your payments may lower, not because of a lower interest rate, but due to the elongation of your payment schedule. Because you take a new mortgage on your home upon refinancing, you may have to pay new closing costs.

To refinance, make sure you understand the basic principles of why you would want to do it.  For all of your home loan needs throughout Solana Beach and San Diego County, as well as all of California, contact Elvin Wesley at Ranch & Coast Mortgage Group Inc. We have the experience needed to make sure you get the right mortgage.