by Susan Paige
Your home’s mortgage may be the biggest loan you ever take out. You’re paying on time and things are good but sometimes you need to opt for a home refinance.
In some cases, you might be in trouble and need to refinance your home because you can see you’re about to get behind on things. Getting ahead of the problem can help you save your home from foreclosure.
1 out of 200 homes will be foreclosed on and you don’t want to be a part of those statistics.
Continue reading this article and we will answer your question of “How often can you refinance your home?”
How Often Can You Refinance Your Home? – The Simple Truth
If you’re thinking of refinancing your home, it can be a little overwhelming. Whether you need money for a home upgrade or you’re worried you’re falling behind, refinancing your house may be a good option for you.
The answer to your question is that you can refinance your home as often as it makes sense. Your bank doesn’t want to foreclose on you and will do everything they can to help you stay in the house.
They aren’t doing everything they can to help you stay in the house because they’re helpful but because it is less expensive for them. If they can approve a refinance for your home — they will.
Before running to the bank to refinance, there are some things you need to think about. We will go over these things in the information below.
Understanding Interest Rates
Before we get into the rest of this article, let’s talk a little bit about interest rates. Many people secure the best rates for their home and are off to the races. Most of these people never think about refinancing for a better rate because a decrease of 1% might seem too low to go through the trouble — but it can mean thousands of dollars in savings.
There are many things that play into how good of interest rates you can secure. Some of them have to do with you personally but other factors outside of your control also determine how high interest rates will be.
If you notice interest rates are dropping or if your personal credit history looks better than when you originally applied for your mortgage, you might want to look into refinancing options.
Questions to Ask Before You Refinance Your Home
Before going for the refinance option, there are important questions you should ask. When you start asking yourself these questions it will be clear to see whether a refinance is a good idea for you or not.
What are the current terms of my mortgage?
Do you remember what your mortgage terms are? Even if you think you remember what your mortgage terms are, you should review the document to make sure.
If you don’t know what your current terms are, you can’t compare other options knowledgeably.
How long am I going to stay in this house?
If you’re going to stay in this same house for a long period of time, it would make sense to refinance your home for better terms in most cases. On the other hand, if you’re going to sell the house in a couple of years, you’re not doing yourself any favors.
How much is it going to cost me to refinance?
There is a lot that goes into refinancing your mortgage and that includes fees. If the fees you’re going to pay to refinance your mortgage are more expensive than the savings you’ll experience — pass.
What age will I be when I repay my mortgage?
When you’re refinancing, keep in mind that you’re increasing the age you’ll be when you pay your mortgage off. If you don’t want to cause unnecessary difficulty in your retirement, you should make sure you aren’t increasing your mortgage into the years you wish to retire.
Do I need more monthly cash flow?
If you’re in a bind and you need monthly cash flow and you’re able to reduce your monthly payment by refinancing, this might be a good option for you.
Do I have enough home equity?
Your home’s equity is the amount of money between what you owe on your home and what your home is worth. If you don’t have enough equity in your home, you may have to pay other expenses due to this factor.
Is my credit good enough?
If you’re worried about your credit score, there are many options for homeowners that don’t have great credit scores. If you aren’t sure if you could qualify to refinance your mortgage, you should speak with a loan officer to see what options are available.
What are my financial goals?
Before refinancing your home, make sure it is in line with your financial goals. If your financial goal is to get out of debt as soon as possible but the refinance is going to add years onto your loan, this might not be the best option.
On the other hand, if it decreases the amount of interest you have to pay and you can pay the loan off early, it may be a good option for you.
Ready to Dropkick Debt?
Now that you know the answer to “How often can you refinance your home?”, you likely feel much more in control. Knowing you have options for your home and finances is a good feeling.
Our site has many other articles that can help you with your debt and guide you as you’re making the best decisions for your finances.
Navigate through our site, find your favorite section, drop a bookmark and come back soon for more great reads.