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Is It The Right Time to Think About Refinancing Your Mortgage?

Have you been considering refinancing your mortgage? For many homeowners, this can be a great financial decision, and it is something that we are seeing growing in popularity. However, that doesn’t mean that refinancing is the best option for you or that now is the right time to think about it! This is the type of decision you will need to consult with a mortgage professional who is well-versed in the ins and outs of home loans in Tennessee. The Erica Kelley Group, powered by Flat Branch Home Loans, can help you re-evaluate your current financial situation and weigh the pros and cons of refinancing your mortgage.

Let’s take a look at some of the things you will want to consider if you decide whether the time is right to refinance home loans in Tennessee.

When To Refinance Home Loans in Tennessee

The big thing about choosing whether or not it is time to refinance home loans in Tennessee is that you need to make sure you are making an informed decision. We recommend discussing everything with an expert such as The Erica Kelley Group, powered by Flat Branch Home Loans. Here are a few signs that could indicate it is an excellent time to think about refinancing.

• When Interest Rates Are Low - Let’s start with the most obvious indication that it is time to think about refinancing home loans in Tennessee - low interest rates. Suppose you see mortgage interest rates that are 0.5% to 1% lower than your current rate. In that case, you could potentially save your monthly repayments by refinancing your loan.
• When You Need to Consolidate Debt or Withdraw Equity - Have you been planning to do renovation work in your home? You may find your finances a bit of a struggle. In both situations, a cash-out and refinance could be the answer. If you have equity built up, refinancing could release it to help fund your remodeling plans or help consolidate some of your debt. Discuss the options with a mortgage professional to decide if this is viable for you and your family.
• When You Can Remove PMI - If your deposit was less than 20%, your lender most likely required you to pay for Private Mortgage Insurance, also known as PMI. However, if you have built up enough equity, it may be possible to do a cash-out refinance, as discussed above, allowing you to put down 20% on your new home loan and remove the need to pay PMI. This will help to reduce your monthly repayments.

When Not to Refinance Your Mortgage

There are also some great indicators of when not to refinance your mortgage. Some of those include:

• If You Plan To Move Within 2 Years - If you are not 100% settled in your home and think that you may consider moving in the next two years, then it is probably not the right time to refinance your home loan. The fees on a refinance can be up to 5% of the loan balance, so if you move within a few years of refinancing, you will find that you lose money rather than saving it!
• If You Have a Low Credit Score - When was the last time you checked on your credit score? Make a point to take a look at it now and find out where you stand. If your credit score is not particularly great, then it isn’t the right time to refinance. When you have a lower credit score, you will usually find you have to pay a larger interest rate! It is better to take some time to improve your credit score before you consider refinancing your mortgage.
• If You Can’t Afford Closing Costs - It is important to note that when refinancing home loans in Tennessee, you will likely need to pay closing costs, which cannot be rolled into the loan. If you are not in a position to pay those fees upfront, then this may not be the right time to look at refinancing. However, you can discuss your options with a mortgage professional like The Erica Kelley Group, powered by Flat Branch Home Loans, to determine the best options. Closing costs can vary, so there may be a refinance option that fits your budget.

If you are considering refinancing home loans in Tennessee or looking for your first mortgage, get in touch with The Erica Kelley Group, powered by Flat Branch Home Loans, to find the perfect home loan that fits the unique needs of you and your family.

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Human-Centred Mortgage Loans

Whether you are a Veteran, a first-time home buyer, looking to refinance, or everything in between, Flat Branch Home Loans, The Erica Kelley Group specializes in finding the right home mortgage for you. It is our honor to help you acquire something that is "yours."

Call 615-423-3095 or email ekelley@fbhl.com