When to Refinance

When it comes to refinancing, timing is everything. Ask yourself these questions to determine if now is the right time to refinance.

1. Are interest rates on the rise? If you have an ARM and interest rates are rising, you might want to consider Sacramento mortgage refinance to switch to a fixed-rate loan. That way, you don't have to worry about wild payment fluctuations in the future. Conversely, if interest rates are especially low, you might also want to refinance, regardless of whether you have a fixed or adjustable-rate mortgage. If interest rates are at least 0.5% below what you're paying now, refinancing can save you money.
2. Are you struggling to make your monthly mortgage payment? If your budget is stretched too thin with your current payments, Sacramento mortgage refinance can save you hundreds of dollars each month. A good rule of thumb is that housing expenses, including insurance, mortgage payments, etc., should not account for more than 20% of your net income each month.
3. Do you want out of your ARM? Many people are attracted to the low initial rates of an ARM only to find the payment fluctuations too nerve-wracking later on. If you don't want to deal with fluctuating payments and interest rates anymore, Sacramento mortgage refinance can help you switch to a fixed-rate mortgage for more consistency.
4. Has your income increased? Remember that some homeowners choose to use Sacramento mortgage refinance to build home equity faster, which means they want to reduce the term of their mortgage and increase monthly payments. If you have recently found yourself in a position to make higher payments on your mortgage than originally planned, consider refinancing to pay off your home faster.
5. Do you now have more than 20% home equity? If so, you can use Sacramento Mortgage Refinance to eliminate your private mortgage insurance (PMI) costs. You might be able to convince your current lender to cancel the insurance, but, if not, you can refinance to eliminate this expense.