Is it your first time refinancing a mortgage? If so, you probably have many questions, and with the overload of information online, things can get confusing easily. Here, we will help you understand the process by dispelling some common myths. Let’s start!
Myth #1: Your Home’s Current Equity Will Be Compromised
Some people think that refinancing their mortgage means losing some of the equity they’ve built over the years. However, that’s not going to happen unless you do a cash-out refinance. A cash-out refinance occurs when you borrow more than the value of your existing mortgage. If you only refinance your existing balance, however, then the decision won’t affect your home’s equity.
Myth #2: You Won’t Save Money
Refinancing your mortgage can help you save a significant amount when it comes to interest. However, it will still be based on your existing loan’s interest rates and the available rates.
It’s always best to carefully consider all the rates and fees associated with a refinance before signing the dotted line because while it can be an incredible financial move, it can also be damaging if handled incorrectly. A skilled mortgage broker can help you select the best refinancing option for your needs.
Myth #3: You Need to Reset Your Loan
One of the reasons some people hesitate to refinance their mortgage is because they believe it will reset their loan. However, this financial instrument does not simply work that way. Rather than simply resetting your loan, refinancing allows you to obtain terms that serve you better. This may mean extending the term but reducing the payments, receiving a better interest rate, or any other number of things.
Additionally, you now have the option to refinance to a shorter-term loan today, and you will be surprised you can afford it! Explore your options and talk to a few lenders to get the best rates for your mortgage refinance.
Myth #4: You Need to Wait a Year to Refinance Again
If you already refinanced and need to do it again, you don’t need to wait a year. It can be as early as six months and you can apply for a mortgage refinance again.
Keep in mind that it isn’t smart to refinance frequently because every time you do, you need to pay for closing costs, which don’t come cheap at all.
Myth #5: You Can Get the Best Rates From Your Current Lender
Many homeowners who plan to refinance fail to explore their options. They tend to stick to their current lender, thinking that they can’t refinance with a different lender. The truth is, you can have your mortgage refinanced by other lenders, so, don’t be afraid to explore your options. Doing so will help you find the best rates.
Myth #6: Closing Costs Are Non-Negotiable
Are they, really? The good news is that the closing costs are still negotiable in a way that you can do something to bring the costs down. However, it’s crucial you get enough information to find the right one for you. Do your research and work with a broker you trust. With their help, shop around to see what offers you qualify for.
Refinance Your Mortgage
Refinancing your mortgage for the first time may seem overwhelming. However, similar to the mortgage process, all you need is the right information and tips to navigate the process. So, are you ready to refinance your mortgage? Yes, you are!
Get the best home refinance for your Bellevue property today at paloRATE. We are on a mission to serve customers with honesty, integrity, and competence. View love mortgage rates here or apply now!