What To Ask When Refinancing

For borrowers considering options for refinancing their mortgages, there are some critical questions to ask BEFORE you get to the loan application process. The answers could help you decide what loan options and terms are best for you.

How long should the term be for the new mortgage loan? Your options include a15-year refinance and a 30 year refinancing loan. How long do you want to pay on the new mortgage?

For some people, this choice can be as simple as looking for the lowest monthly payment available. It can be more complicated if you are deciding how soon you want to own your property and get rid of your mortgage payment.

Is there a move in your future? Government-backed loans may feature occupancy rules depending on the type of loan and the loan program you choose.

Eligible veterans aren’t bound by occupancy requirements when applying for VA streamline refinancing, but any cash-out refinancing loan backed by the government may require you to maintain the home as your primary residence. Remember the occupancy rules when you are trying to make up your mind.

Will you ever refinance again? Some borrowers may decide later to apply for a home equity line of credit or an FHA Home Equity Conversion Mortgage (HECM) when they reach the eligible age.

Think about refinancing loan options carefully and consider those down-the-road options. This can help you give yourself enough time between refinancing options to build up more equity in the home and watch the market for the most advantageous time to apply for refinancing based on interest rates and property values.

Are you trying to repair credit? Refinancing loan applicants with good credit have few worries in this department, but borrowers with past delinquencies, Chapter 7 or Chapter 13 bankruptcies, or trouble making regular payments should give themselves at least 12 months from the time of their last late or delinquent payments before trying to apply for refinancing their California home loans.

These questions can be a big help in determining the right path for you when it comes to refinance loans and the timing of your application.

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