In the vast majority of cases, mortgage refinancing is a practice that homeowners think about several years or even decades into a given mortgage. Refinancing is commonly done to get better rates, change the loan term or type, borrow additional funds or remove a co-signer, most of which generally don’t take place until years into the loan.
At Primary Residential Mortgage in Lake Dallas, we have a wide range of home loan options available, including refinancing programs. And while most people don’t consider these until later in the mortgage, there are several situations where you might benefit from a refinance nearer to the beginning of your loan period – here are a few of those situations and some details on why an immediate refinance can be a major boost for some people.
Decreasing Interest Rates
In certain cases, such as when market interest rates drop significantly soon after you take out a mortgage, refinancing is actually the prudent decision for any smart financial homeowner. Any rate drop of more than about 1.5 points compared to your initial rate should almost automatically trigger you to at least investigate refinancing, and even smaller drops than this could fit the bill as well – those cases might depend on areas like closing costs and other fees associated with the refinancing process. Speak to our professionals about calculating whether refinancing in this position is the right move for you.
Need Additional Funds
For those in a tough financial period or in a spot where they need some additional cash, an early refinance is often a top option if your home is worth more than what you owe on the mortgage – a common situation. While it’s generally preferable to continue to build this equity in the home, it can be used for a cash-out that will benefit you in several areas.
Down similar lines, if your current mortgage payments are becoming a bit too burdensome, a refinance to change your loan term or the rate format might go a long way. In some cases, switching to an adjustable-rate mortgage is all that’s needed.
Big Income Change
For some other homeowners, a major income increase soon after taking out a mortgage could be another good reason to refinance sooner rather than later. Such an increase might allow you to pay the loan down faster, and you might want to switch from a 30-year mortgage down to a 15-year option to accomplish this.
For more information on why a refinance might be right for you soon after taking out a mortgage, or to learn about any of our home loan services, speak to the staff at Primary Residential Mortgage today.
*PRMI NMLS 3094. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Opinions expressed are solely my own and do not express the views of my employer.