Heard of the terms ‘home refinancing’, but aren’t quite sure what they mean? Don’t worry. You aren’t alone. You can think of this page as a guide to the world of home refinance. Let’s jump in!
What is Refinancing?
Chances are that you have a mortgage on your property.
When you refinance a home, you are essentially taking out a second loan. That second loan will pay off the mortgage. You will now have newly negotiated terms which, in many cases, will have a far lower monthly repayment than your previous mortgage.
Who Qualifies for Refinancing?
Obviously, the main thing is that you own a home. If you do not own a home, you can’t apply for home refinancing. This is because this is a secured type of loan against your property.
You should also have a decent credit score. It should be at least 550 to 600, although veterans may be able to apply for a home refinance with a lower credit score than this.
You should also have the ability to pay off the newly refinanced amount on your home. If you could already afford your mortgage, then you should be fine here.
Should You Use Refinancing?
In some cases, yes.
Refinancing works best when you are already partway through your mortgage. A few years, in fact.
We know that there are some people out there that would recommend refinancing only when they struggle to meet the mortgage repayments, this isn’t something that we suggest.
We suggest that you refinance to bring down the monthly repayments that you need to make toward your home. It can help to free up a few funds each month, which is nice.
Refinancing is also fantastic if you have a huge interest rate on your mortgage, or even if the value of your property has risen in recent years.
Honestly, if you have a decent credit score, then we suggest that you look into refinancing. Sure, there are some people that are probably going to be benefiting a lot more from a home refinance than others, we reckon that the vast majority of homeowners will see some benefit there, if only so that they are cutting back on the amount of money that they are spending each month.
Remember, there are a lot of companies out there that offer refinancing services. It is important that you do your research. If you do that, then we promise you, you are going to end up having a far easier time getting approved for refinancing. It also means that you are going to end up with a decent company that you can talk to about what you need from your home refinance.
Remember, if you do not opt to go down the route of a full home refinancing, it is still worth looking into the idea of it. It can’t hurt, and you may end up finding that this type of refinancing is going to be fantastic for you!