What to Know About Refinancing Your Mortgage Is now a good time to refinance your mortgage? along with how long you plan to be in your home. Here are some answers to the commonly Compare these costs against the cost to refinance. asked questions. Make sure youʼll save money in the long term. What are the Benefits? What is Involved in a Refinance? There can be many benefits to refinancing. Every- Before you move forward with the refinance, know oneʼs situation is different, so do your homework what it will cost. Lenders should provide a good and consult a trusted lender for advice if youʼre faith estimate of what the associated costs will be. unsure. Some common benefits are: Compare lenders as the fees can vary greatly > Locking in a lower or fixed rate depending on the institution and consider how these costs play into your long-term financial plan. > Lowering monthly payments As mentioned before, if you only plan to stay in > Accessing the equity in the home the home short-term, make sure the costs of > Consolidating debt completing the refinance donʼt outweigh the savings. Some costs may include: > Paying off the home sooner to save money on interest > Application fee > Building equity faster > Title and insurance fee > Appraisal costs When is a Good Time to Refinance? > Loan origination fee The answer to this question depends largely on > Discount points what you hope to gain by refinancing. Whether the time is right for you is a decision only you can Getting Started make—with input from a trusted lender. Probably the most important thing is finding a Adjustable Rate Mortgages or ARMs became lender you can trust and who will help you navigate popular in recent years because it allowed people the process. Remember that just because one to take advantage of initially low rates. However, place is offering a lower rate, doesnʼt necessarily now those rates are adjusting and many people mean they will ultimately be the best deal for you. are finding themselves with payments they canʼt Ask for good faith estimates and compare them afford. If you have an ARM, refinancing to a fixed all. In the end, go with someone you trust. Also rate may be a smart option. make sure youʼre familiar with the terms of your current mortgage. Some mortgages have Refinancing also is a good option when you can prepayment penalties. obtain a lower interest rate. However, consider how much youʼll save on your monthly payment This information is compiled courtesy of West Community Credit Union in Brentwood, OʼFallon and Kirkwood. For more information, contact us at (636) 720-2400 or (800) 500-6860.
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