Better Homes and Gardens Rand Realty
Kenneth Rabasco, Better Homes and Gardens Rand RealtyPhone: (914) 844-2885
Email: [email protected]

Tips to Consider When Refinancing Your Mortgage

by Kenneth Rabasco 09/08/2019

The Mortgage Bankers Association (MBA) refers to mortgage refinancing as a crucial aspect of all mortgages. This is partly because comparatively, low mortgage interest rates have encouraged homeowners to restructure their financial situations using their home equity. Homeowners should base their refinancing decision on their circumstances rather than mortgage interest rates. Here are tips to consider when considering refinancing your mortgage: 

Home Equity

You need to have home equity before you can even consider refinancing your home mortgage. Home values are steadily rising which means that with conventional lenders, you can have enough equity to get a loan. Most lenders will allow a homeowner with at least 20% equity to get credit quickly.

Credit Score 

In recent years, lenders have made the requirement for loan approval stricter. Therefore, some consumers with good credit may not qualify for the lowest interest rates. Typically, the acceptable credit score by most lenders is 760 and above. Borrowers whose credit scores are not up to the satisfactory score may still obtain a new loan but with higher fees or interest rates.

Refinancing Cost

Refinancing costs usually take between three to five percent of the loan amount. Borrowers can look for ways to reduce this cost or incorporate it into the loan. The cost can also be rolled into a new loan if you have enough equity. With some lenders, you are likely to pay an interest rate that is slightly higher to balance the closing cost when you take a loan with them. Make sure that you negotiate and ask several lenders so that you get the best fees for your refinancing loan.

Rates vs. Term 

A borrower needs to have a goal when refinancing to know the exact mortgage product that is most favorable. If all you want is to reduce your monthly payment to the minimum, a loan with a long-term interest rate will be beneficial. If your goal is to pay a reduced interest rate over a short period, you should consider the lowest interest rate in the shortest term. 

Break-Even Point

Before deciding to refinance your mortgage, determine the break-even point. The break-even point is the time at which your monthly savings have covered your refinancing cost. Beyond this point, your monthly savings belong to you. This also means you know how long it will take before your refinancing makes sense if you intend to sell or move from the home in some years.

Mortgage refinancing can be quite confusing, so you need to be sure you completely understand the terms and conditions. Do your research and also speak to a financial planner to give you professional advice.

About the Author
Author

Kenneth Rabasco

Professional Associations & Designations

Ken Rabasco aka Bosco is a member of the National Association of Realtors, the New York State Association of Realtors, Hudson Gateway Association of Realtors, and the Hudson Gateway Multiple Listing Service.

As a lifelong Westchester resident, Bosco has a vast and extensive knowledge of the intricate details that comprise the communities of Southern Westchester, be it a recommendation for the best place to have dinner in one of the many River Town restaurants, or a market forecast for what the future will hold for the next place you'll call home. With a laser-attentiveness to detail and a never-faltering determination to get the job done, Bosco is supremely dedicated to his clients, and promises the very best in service to those who work with him, whether a first-time buyer or a long-time veteran of the market. 

Real Estate Expertise

Licensed Real Estate Salesperson with Better Homes & Gardens – Rand Realty. Bosco specializes in listing and selling of co-ops, condos and houses in the Bronx and Southern Westchester covering Hartsdale, Ardsley, Scarsdale, Eastchester, Tuckahoe, White Plains, as well as the River Towns and those that are on the Long Island Sound.

As a licensed real estate salesperson for Better Homes & Gardens – Rand Realty in White Plains, I have developed a dedication to client service and satisfaction that is unsurpassed. I am up-to-date on all the real estate market trends. With a professional, yet friendly approach, I help my clients feel comfortable when buying or selling their next home. 

Member Community Involvement

Member of the Rotary Club of Hartsdale - Greenburgh 

Adjunct teacher for the My Money Workshop - This organization teaches financial literacy to young adult and those who need a helping hand to get back on their feet to lead a productive life.

Education

Pace University - Bachelor of Business Administration