The housing market is a mess! I know, there are a lot of you out there who purchased your real estate with a variable interest rate loan, and you are know stuck with payments that are far above your capability to pay. There is a lot of talk out there about refinancing, but is it for you? While that may be a question you have to answer for yourself through research on the real estate market as it stands today and the costs involved in refinancing, there are some tips you will want to keep in mind. First of all, if you are considering this option make sure you hire an honest, experienced and reputable real estate appraiser. You will need a real estate appraiser to appraise your home for what it’s worth today, and they in turn will work to get you the fair market value for your real estate.
- Ask yourself how long you’re going to stay in your home. The next step is to divide the cost of refinancing by 12 to find out how many months you need to stay put for a refinance to be monetarily worthwhile. Typically you need to stay put for at least three years and secure a rate at least 1 percent lower in order for refinancing to make sense.
- Contact your current lender first if you’ve just purchased your home. That’s assuming you were dealing with a reputable lender and not one of the lenders that got people into this mess to begin with. Remember, your lender will require you get your real estate appraised for the current value.
- Pay attention to fees and closing costs, as with a first mortgage. These will include the cost of getting you’re your real estate appraised and may differ a great deal from one lender to another.
4 Consider limiting the term to be no longer than what is left on your current mortgage, or you’ll end up with much lower payments but a much longer mortgage.
Keep in mind that in order for refinancing to make sense for you, you want to make sure you get a lower interest rate and ensure that the costs involved are as low as possible. You will also want to make sure to have your tax returns, bank account statements, credit card statements, W-2s, brokerage account statements, title and purchase agreement, proof of home owner’s insurance, taxes and other materials ready.
Knowledge is power, and with a few simple tips in your arsenal you may just get yourself a better deal.
Visit us at www.iappraiseforyou.com for more information on real estate appraisals, or to fill out your request for an appraisal.