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If you think you are ready to restructure your mortgage, there are some things you should consider.

Refinancing can change your financial picture quite a bit and every home owner’s situation is different, so there is no blanket way to say when you should or should not refinance.

At Element Mortgage though, we try to educate homeowners on their options so that they can make wise decisions about their future. Here are five things you should ask yourself if you are considering refinancing.

What timeframe are you looking at?

If your intention is to pay off your loan as quickly as possible, maybe you should consider a home loan that comes with a short term with payments that fit within your budget. If your goal is to pay less on your interest over the life of the mortgage, then maybe you should consider the lowest interest rate with a short term.

How much equity do you have?

If you have not regained the value in your home, refinancing may be difficult, but possible with some government loan programs. If you have at least 20 percent equity built up in your home, then your chances of qualifying may increase.

Are you aware that there are refinancing costs?

Generally speaking, if you refinance you can expect to pay somewhere in the range of 3 percent to 5 percent of the total mortgage amount. There are various ways to include a portion of these costs in the loan so make sure to discuss this with your lender.

Have you calculated the point when you will break even?

You should try to calculate when the price you will pay to refinance is covered by what you will be saving on a monthly basis after the refinance is complete. This is where determining how long you plan to stay in the home comes into play.

What is your credit score?

If you are seeking a lower interest rate through a refinance, lenders typically require a good credit score to qualify. Generally speaking, you can expect a requirement of around 760 to avoid higher fees correlated with the cost of refinancing.

If you are a Roseville resident and looking to refinance, make sure to contact one of our mortgage consultants if you have any questions. We take pride in taking the time to get to know you and your unique financial picture.

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