The mortgage rates have hit yet another record low, so it is no wonder so many Californians are refinancing their homes. In fact, the refinance applications are 111% higher than in 2019, according to the Mortgage Bankers Association. But before you refinance your home there are some things that you should know about the process.
Calculate Your Mortgage Refinancing Savings
To calculate your monthly savings from refinancing, use a mortgage calculator. By entering your current mortgage information and comparing your new monthly payment to your old monthly payment, you can see how much money you could potentially save by refinancing your home.
Choose Your Refinance Mortgage Loan Type.
Homeowners can choose from a few different refinance products depending on their financial situation such as a rate and term refinance, cash-out refinance, or cash-in refinance. As you can see, there are multiple options available.
30 Year Vs. 15 Year Refinance Mortgage.
One of the things to consider as well is the duration of the loan as it can be a 30 year or a 15-year loan. In a 30 year loan, most of your monthly payments go toward interest for at least the first 7 years of the loan, most of the time. You will have little home equity for many years unless you are able to build it faster through home-price appreciation or extra principal payments. Refinancing into a 15-year mortgage helps you build equity faster, but it may increase your monthly payment depending on how the loan is structured.
These are some of the reasons why we are encouraging everybody that has a mortgage loan over 4% to consider refinancing. You could save tens of thousands of dollars over the life of your loan by refinancing. If you are confused by the process or have any questions or concerns regarding your future refinance, give us a call or schedule a consultation by clicking here. We can help you through this process as we have for many other clients.
Premier Mortgage Resources, LLC | NMLS #1169 | Equal Housing Lender Not an offer to extend credit or commit to lend. California Licensed by the Department of Business Oversight, under the California Residential Mortgage Lending Act. “This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice.”