When is the best time to apply for a home refinance loan? The best time to consider refinancing is when the offered rate is lower than your current loan rate. Even if it is half a percent lower, it will translate to a significant amount as the days go by. It will save you precious cash and help you build your home equity faster.
If you can, try to take out a shorter-term loan if possible. Be wary, though, because it might cost you more money if you don’t know how to do the math. The best thing to do is use our mortgage calculator to help you decide if a short-term loan is financially beneficial.
Another reason why you should consider getting a home refinance loan is if you are going to convert your current adjustable-rate mortgage (ARM) or fixed-rate mortgage. ARMs usually offer lower rates initially compared to fixed-rate mortgages, but this will depend on how much the adjustments are interest-wise. If the rates have been going up, it would be good to take a second look at refinancing. Maybe a fixed-rate mortgage will be beneficial in the long run because you know that even if market rates go up, your rates remain the same.
Applying for a home refinance loan is a good move if it will shorten your loan repayment, significantly reduce your monthly mortgage payment or help you beef up your equity. Refinancing is also an excellent way to help you control your finances. Bear in mind that there are refinancing costs. Refinancing will set you back 3%-6% of your current loan’s principal. If you only have a few months left on your loan, taking home refinance loan might not be an excellent financial move. It would be good to consult our mortgage officers so that they can help you navigate your home refinance loan course.