Wednesday, July 1, 2020 / by Sonya Reiselt
Mortgage rates are at their lowest levels in years, and as such, many Beaufort County home owners are refinancing their homes. Even if you refinanced your home last year, it still may be a good idea to look into a refi now.
Even though rates are the main driver for refinancing your home, there are some other factors to consider.
How much will it cost?
While it's true that refinancing will lower your monthly payments, there are fees involved. You need to take into account all the fees and determine how long it will take to break even.
As an example, if you pay $3,600 in fees to save $100 a month, it will take 36 months to break even. So if you plan to be in your home in Beaufort County longer than that period (or whatever period you calculate it will take) then refinancing might be worth it.
Consider the terms
You don't need to stay with a 30-year loan. If you go with a 15-year loan, you can pay off your home earlier. Or if you currently have an FHA loan, then you can switch to a conventional loan and get rid of the private mortgage insurance (PMI), which will save you even more money per month. Consider all of your options.
How’s the service?
You need to find a lender who will take care of you and handle all of your questions. There's a ton of paperwork involved, along with all the personal information you'll need to give them. Having a reliable company to handle the process will go a long way to making the process go smoothly.
A conventional loan isn't your only option.
Conventional loans are not your only option. One lesser known alternative is an FHA streamline. With this loan you don't have to jump through as many hoops. It's considered a ‘low-doc’ refinance with limited paperwork required. The lender won't need to verify your income or credit, and there’s no home appraisal. This will lead to a faster closing than other loans and is a little less expensive.
Did you get a second opinion?
You shouldn't automatically go with your current lender. Make sure to check with other lenders as well. Going with your current lender will not negate the amount of paperwork involved. They still need to go through the process all over again, just like any other lender.
Refinancing may not be the best option for every home owner in Beaufort County. But if you are considering refinancing, then now is going to be your best opportunity for years to come.
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