With home interest rates lower than ever, many homeowners are refinancing their mortgages. WEI Mortgage Corporation details what customers should consider when refinancing.
Refinancing is the process of replacing your current mortgage with a new mortgage in an effort to save on monthly payments. This can be accomplished by either lowering the interest rate, adjusting the length of the mortgage, or a combination of the two. Interest rate adjustment is one of the most important considerations in properly refinancing a home.
Interest rates can either fluctuate throughout the loan, called adjustable-rate mortgages, or are fixed at a single rate for the life of the loan. Where a home loan is on a fixed rate that exceeds the current market interest rate, refinancing may help you save considerably on your monthly payments by taking advantage of the lower market rates. If you plan on living in your home for the next several years, the cost of the refinance will be paid by the monthly savings in the long run.
For borrowers who wish to refinance to an adjustable-rate mortgage, lower monthly payments are also possible, however, there is also the possibility that the current market rates adjust upward, thereby negating any future savings. This type of refinancing may be attractive if you plan to sell your house before the rate increases, for example.
Beyond considering rates and terms, refinancing a home also usually involves a variety of processing costs that can significantly affect the amount you save. Such fees include document preparation fees, title costs, and appraisal fees. These amounts can vary from one lender to another. Thus, it is important to look at a number of plans to determine your ideal new mortgage. WEI Mortgage is happy to work with you to determine whether refinancing is appropriate and what options are best for your needs.
WEI Mortgage Corporation has routinely been honored as a top-tier lender by its various investor partners and is a licensed lender in 38 states and the District of Columbia. For more information on the company’s services, visit www.weicorp.com.