Mortgage News Daily: Is Today The Day to Refinance My Mortgage?
CMS Mortgage Solutions Inc.
CMS Mortgage Solutions Inc.
Published on June 4, 2022
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Mortgage News Daily: Is Today The Day to Refinance My Mortgage?

Mortgage News Daily: Getting a Pulse on Refinance

The sun is shining and the birds are chipping, its a great day! But, is it a great day to refinance your mortgage? You may be able to get a lower interest rate or shorter term by refinancing, but you’ll want to make sure you do your research and are prepared to pay closing costs. There are a lot of factors to consider when refinancing, so we’ve put together this refinancing survival guide to help guide you through the decision of refinancing your home.

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What Does Refinance Mean?

Refinancing your mortgage means trading in an old, high-interest loan for another one with lower rates. You may also do this if you want to pull some equity out of the property and have it work as cash or trade goods like stocks, bonds etc., but many homeowners just prefer having less monthly expenses entirety instead!

When is Refinancing A Good Idea?

Generally, Refinancing is almost always a good decision if you can save money, get faster pay off of your mortgage and build equity. If individuals can get a lower interest rate by lowering their monthly payment by 1/2 – 3 quarters of one percent then this will help them pay off debt faster with more equity in the process.

Reasons to Refinance

There are several reasons why you might want to refinance your mortgage. For one, refinancing can save you money on interest payments. It can also help you shorten or lengthen the terms of your loan, or consolidate debt.

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How do you know if refinancing is right for you? It depends on your individual situation – there is no one-size-fits-all answer.

But here are some general reasons to consider refinancing:

1. You’ve been approved for a lower interest rate – One of the main reasons people refinance is to get a lower interest rate. If you’ve been approved for a lower rate than what you’re currently paying, it could be worth refinancing to take advantage of those savings.

2. You want to switch to a shorter or longer term – Another reason people refinance is to change the terms of their loan. If you want to switch from a 30-year mortgage to a 15-year mortgage, or vice versa, refinancing can let you do that.

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3. You want to consolidate debt – Consolidating your debt into your mortgage can be a smart way to save money on interest payments and make your debt more manageable.

Risks of Refinancing and How to Avoid Them

While there are many benefits to refinancing, there are also some risks involved. The main risk of refinancing is that you could end up paying more in interest over the life of the loan. If you’re not careful, you could also end up extending the length of your mortgage, which could mean higher monthly payments down the road.

There are a few things you can do to avoid these risks:

1. Make sure you compare interest rates – It’s important to compare interest rates from different lenders before you refinance. That way, you can make sure you’re getting the best deal possible.

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2. Don’t extend the length of your mortgage unless you need to – Sometimes people extend the length of their mortgage simply because they can. But unless you need to, it’s usually not a good idea to extend the term of your loan.

3. Pay attention to closing costs – Closing costs can add up, so be sure to budget for them when you’re refinancing.

4. Avoid cash-out refinancing – Cash-out refinancing is when you take out a new loan for more than the amount of your old one. It can be a great way to get a lump sum of cash, but it can also end up costing you more in interest over the life of the loan.

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The Refinancing Process

The process of refinancing a mortgage can be long and complicated. Here’s a step-by-step guide to help you through the process:

1. Research – The first step is to do your research. Compare interest rates from different lenders and make sure you understand all the terms of the loan.

2. Apply – Once you’ve found a lender and gotten pre-approved for a loan, it’s time to apply. Be prepared to provide detailed information about your income, assets, and debts.

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3. Closing – Once your loan is approved, you’ll need to go through closing. This is where you’ll sign all the paperwork and pay any closing costs.

4. Receive Funds – After closing, the lender will send you the funds to pay off your old mortgage.

5. Enjoy! – Congratulations! You’ve now refinanced your mortgage and are ready to enjoy.

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How Long Will Refinancing Take?

Refinancing doesn’t happen overnight. It is a long process that averages around a month and a half to complete.

The number of options available to you when it comes time for a refinance should not be overlooked. Think about how quickly some lenders close and ask them what their average closing times are as well as any estimated fees that may come along with the process. Be patient and don’t rush into anything. Make sure you compare interest rates from different lenders, understand all the terms of the loan, and budget for any closing costs. Once you’re ready, go through the application process and enjoy the savings you’ll get from refinancing your mortgage.

So, is today the day? Well, we can’t answer that for you. If you’re careful, you can build equity and shorten the length of your mortgage through refinancing. Overall, refinancing can be a great way to save money on your mortgage – but it’s important to weigh the risks and benefits before you make a decision.

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CMS Mortgage Solutions Inc.
CMS Mortgage Solutions Inc. Virginia Beach
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