Wondering if you should refinance your home mortgage? Curious about the process? Trying to figure out if it’s the right move in your situation? To prepare to refinance, here are some of the elements you should consider.
Why do you want to refinance your home mortgage?
Before you apply to refinance your home mortgage, you may want to think about your reasons for doing so. There are a number of reasons that people work with mortgage brokers in Atlanta to refinance, and they include some of the following:
- You want to lower your interest rate
- You want to reduce your monthly payment
- You want to shorten or lengthen the term of your mortgage
- You want to switch from an adjustable interest rate to a fixed interest rate
- You want to get your mortgage guaranteed by a group such as the Federal Housing Administration, the US Department of Veterans Affairs, or the US Department of Agriculture
- You want to take out some of your home’s equity to use for home renovations, college tuition, starting a business, or other expenses
- You want to take out a line of credit against your home’s equity
- You are getting divorced and want to remove someone’s name from the mortgage
Your objective may dictate the type of refinance mortgage that is best in your situation. To identify the best type of loan, you may want to contact a mortgage broker in Atlanta to learn more.
Can you afford to refinance?
Once you have thought about the reasons you want to refinance, you need to decide whether or not you can afford to refinance.
To give you an example, imagine that you’re thinking about tapping into the equity of your home. Let’s say you currently owe $200,000 on your home, but it’s worth $360,000. That means you have approximately $160,000 in equity. When you refinance home mortgage, you take out a loan for $300,000. That is 80% of the home’s value, and it essentially puts an extra $100,000 in your pocket to be used for a variety of purposes. However, before taking out the loan, you need to ensure that you can afford to make the payments on a $300,000 mortgage.
That said, there are also cases where you can’t afford not to refinance. To explain, let’s say that you’re having trouble making your current mortgage payments, but you refinance home mortgage for a lower rate and that lowers your monthly payments. By taking the time to refinance, you made your life more affordable.
Once you’ve worked through these preparatory steps, you can start to research different loan options. Then, you can submit an application and get your home appraised and finally, you get to work with your Atlanta mortgage brokers to close the deal. If you’re ready to start applying to refinance a home mortgage, contact us today. At Capital Mortgage Advisors, we have mortgage lenders who really care about your need to have the best Atlanta mortgage. To learn more and to get started, contact us today.