Refinancing is a way many homeowners are able to lower their interest rates, put money towards much-needed improvements, or even consolidate their debts into one loan instrument. When it comes to refinancing there are hundreds of options and thousands upon thousands of lenders at your disposal, but we wrote the book on refinancing!
And while we can’t share the entire dialogue with you today, there are a few things you should know about refinancing as told by the experts. Here are some of the high points:
Refinancing in a Nutshell
If you’re new to the world of refinancing, then there are some basics you need to understand. Refinancing is simply trading a loan for a loan. You qualify for financing for a new loan and use that money to pay off your existing mortgage. But why would you simply trade debt for a debt?
The short answer for many folks is lowered interest rates. For many borrowers who have owned a home for several years, they can capitalize on today’s lowered interest rates to save money for the remainder of their debt. Additionally, some borrowers choose to shorten their loan term which also saves money. Finally, if you are in need of home repairs, updates, or renovations, then you can actually take more than your mortgage’s value in cash to put towards those repairs.
Is it Worth the Trouble?
If you remember getting your first mortgage, it may have seemed like much more of a headache than it actually was. Depending on when you took out that mortgage it may very well have been.
Fortunately, the refinancing process is significantly abbreviated compared to taking out an original mortgage. After all, lenders have a long track record of your payment information and if you’re looking to refinance, then you’re very much serious about improving your loan situation and taking care of business.
All of that to say, yes, it’s very much worth the effort to get significantly lowered interest rates, better terms, or both in combination with other cash-out options.
The Fine Print
One thing to be aware of when shopping around for refinancing options is that there are some remarks in the fine print you’ll want to be privy to.
Since you’re effectively taking out a new loan, there may be fees associated with your new loan that look eerily familiar to your original loan. There may be closing costs, origination fees, and lender fees that could cost you hundreds or even thousands of dollars either upfront or over the duration of your new loan.
Depending on what your goals are for refinancing, those additional fees in the fine print may not be a huge deterrent to you. If they are, there are many refinancing options where those fees can actually get rolled into the loan itself essentially making those fees fractional parts of your monthly payment. On the other hand, if you can avoid the fees then, by all means, do so! Look for a lender with no origination fees and few, if any, additional costs on top.
Contact the Refinancing Experts
There really are virtually endless options for refinancing your home, so it seems logical to turn to the experts who wrote the book on refinancing: Tidewater Mortgage Services, Inc.
For over 30 years, Tidewater has helped homeowners just like yourself get pre-qualified and get the credit they need to make their dreams a reality. Apply online and you could get prequalified in as little as 24 hours!
