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What is a Refinance

What does it mean to refinance? If you’ve never experienced a refinance before, it might seem a little confusing.  In it simplest terms, to refinance your home means you replace the mortgage you have with a new home loan. Hopefully with better terms.

When to Refinance

People refinance for multiple reasons. The decision to refinance or not depends on interest rates, closing costs, how many years you will remain in your Plattsburgh home, and whether refinancing saves you money.

It may take months or years for the savings from refinancing to cover the closing costs. You need to know how long it takes to break even before you refinance.

Do not just focus on interest rate. There are many factors that play into a payment or term reduction. Can you remove private mortgage insurance? Can you access cash you need for an emergency?

Top Reasons to Refinance

Refinancing a mortgage can solve many problems. Some include reducing your monthly housing cost, accelerating your mortgage payoff, providing cash for other needs, removing former partners from the title to the home, and eliminating mortgage insurance.

Cashing Out

In markets where homes have increased in value, homeowners can refinance to take out cash to pay off debts or even home improvements.

Rather than move some borrowers take extra money to update their homes.

LOWER Your Rate

In Plattsburgh NY the number one reason to refinance is to drop your interest rate. You may be able to do it by refinancing to a different loan, for example, a 3/1 ARM fixed for three years, or a 15-year home loan.

You can reduce your interest rate if your credit scores have increased, or if your property value has increased, or if the mortgage market is better than it was when you got your loan.

Shorten Your Mortgage Term

Some refinance to get a shorter term. They may have been paying on a 30-year loan but want to pay off the mortgage  quicker, and rates for shorter terms are much lower.

Get out of an Adjustable Rate Mortgage

When interest rates are on the rise, homeowners with ARMs get nervous. If your interest rate can increase, and you plan to keep your Plattsburgh home more than a couple of years, consider refinancing.

Exchanging your ARM for a fixed loan can provide peace of mind, if not a lower interest rate.

Cancel Mortgage Insurance

Mortgage insurance drops automatically once you pay down your loan to 78 percent of the purchase price. However, if your property appreciates in value, you can drop MI sooner by refinancing. If the current value is higher than how much you paid for the home, this can be possible

If you have a 30-year FHA home loan which closed in 2013 or later, you don’t get to drop mortgage insurance no matter what your loan-to-value (LTV) is. the only way to avoid paying mortgage insurance is to refinance.
If you want to learn about your refinance options. Give us a call at (518) 324-5544 or click here and one of our Plattsburgh Mortgage Professionals will discuss your home loan options.