How Soon Can A Mortgage Be Refinanced?
There are quite a few advantages to having your mortgage refinanced
. Of course, the most significant and obvious reason is the lower rate you'll savor. When applied at the correct time and opportunity, having a mortgage refinanced can save you thousands of dollars in the long run. All the same, since timing plays an essential role in refinancing, it's important that you understand the aspects that can affect how successfully you can take benefit of it. So how soon can a mortgage be refinanced and should you?
The correct time
Acquiring a mortgage is not for sissies. This loan type, whether you're taking it out to buy a car or a house, is easily one of the greatest financial choices you'll ever make in your life.
If you're taking out a home mortgage loan and are considering getting it refinanced later, you'll be glad to know that you may may do it any time you want. But once you have a mortgage and rates of interest begin behaving in a manner that is favorable to you, you shouldn't automatically try for refinancing.
First, the difference in the new interest rate and the present monthly interest should be sufficient to actually give you some advantages. Second, most lenders will probably advise you to refinance only after your loan has grew up for a nominal amount of 12 months or so.
Still, it's good to consider this given that rates of interest have remained more or less the same. If, any time after you've removed a mortgage loan the market trend begins tipping to your benefit, you should look at refinancing your loan. Remember that interest rates are rather volatile and if you wait long for them to dip further, you could neglect a very good opportunity to get a good deal.
Consider the 2 percent rule.
Just because interest rates have fallen a tiny bit doesn't necessarily justify your choice to refinance. Consider refinancing provided that the new monthly interest is at least 2% lower compared to the rate you're currently paying. A 1% difference in interest is not sufficient reason to make the switch.
Don't forget that there are costs connected with a new loan. When you think about refinancing for your mortgage, don't forget that you must pay extra for closing fees. An interest as little as 1% will not cover the trouble.
You have no late payments.
You could proceed and refinance a mortgage provided you have paid your loan faithfully for the last twelve months. If you have never had a late payment during the last year, you might make the shift and have your mortgage refinanced.
You have already built up equity.
If you prefer to refinance a mortgage soon, try to look at if you've already built up equity. You should have a minimum of about 5% or 10% equity ( dependent on the lender) before you could think about refinancing as a feasible alternative.
So is refinancing an option for you?
Naturally, you can always consider refinancing your mortgage any time you feel most comfortable. The key is to consider the time factor, together with the sort of opportunity being presented by the market. In the end, refinancing is certainly getting a new loan. Just be equipped for the processes and costs that you will need to go through once more.
by: Abraham Itunnu.
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