That’s the question of the day! Word on the streets is the home loan interest rates are at historic lows so it’s safe to wonder if refinancing your home loan is in your future.
In order to determine if you should refinance your mortgage ask yourselves these questions:
1. Do you know your home’s value?
First and foremost, the most important aspect of refinancing is whether or not you have any equity in your home. Luckily, at this time, the Charleston market and home values are still on the rise. The best way to know your home’s value is to speak with a lender and discuss your personal needs. Homeowners with at least 20% equity in their homes will have an easier time qualifying for a refinance.
2. Does refinancing make financial sense?
The thought of refinancing can be exciting, especially if you can lower your payment by several hundred dollars a month; however, make sure to work the numbers and ensure it makes sense over the long haul. Refinancing your home does cost 3-6% in additional closing costs even though you are just revising your original loan. Make sure to refinance only if you plan to stay in your home for a long time to make up for those accrued closing costs.
3. Do you know your credit score and debt-to-income ratio?
Interest rates may be lower, but lenders have tightened their leashes on who qualifies for those lower rates. If you don’t have a credit score of 760 or higher and your debt-to-income ratio isn’t 36% or less, you may have a hard time qualifying for those lower rates. Speak to your lender and see if it is worth your while to try to shoot for those lower rates.
Have these documents ready for your lender and you’ll be well on your way to refinancing your mortgage!
1. Current full name, address, phone number, and email address
2. Copy of Current Driver License and Social Security Number
3. Current Employment including the address and phone number
4. Length of time on the job and current position
5. Current Paystub showing year to date income
6. Current and prior year W2’s
7. Most Recent 2 months Bank Statements for deposit accounts
8. If retired Current year award statement from Social Security (all pages)
9. If retired Current Year Pension Award Letter
Looking for more info on refinancing your home mortgage? Contact Us and let us help unlock your future.
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