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Understanding How To Refinance

Jul 23, 2018 11:39AM

The landscape of mortgage refinancing is shifting, but that shouldn’t scare homeowners away from considering this financial move.

According to the Ohio Credit Union League’s 2018 Mid-Year Consumer survey, 57 percent of respondents have refinanced a mortgage, to take advantage of better rates, payments, or loan terms.

A common way to save money is to find a loan with a lower interest rate, but that method may be more difficult to find these days. The improving economy has led to increasing interest rates on a variety of loans, including mortgages.

Falling interest rates may be a common reason to refinance, but it isn’t the only one.  For example, if a homeowner opted for a 30-year loan, but is now in a better financial position to make more substantial payments, it might make sense to refinance the mortgage with a shorter term.

Here are some tips for intelligent refinancing:
Be sure refinancing is the right choice for you.  Before considering refinancing, make sure you know the rate and term of your current mortgage, as well as how that compares to present rates in the market.  Understand how much you stand to save by refinancing before making the decision.

Understand why you’re refinancing.  If you need to free-up money in the short-term, you may want to consider shopping for a loan with a significantly-lower interest rate or monthly payment.  If you can afford larger payments, and want to save over the life of the loan, shopping for a shorter-term loan may make more sense.

Raise your credit score.  Make sure your credit score is in good shape.  A credit score in the mid-700s will serve you well.

Search for the best loan offer. Shop around for institutions offering the best loan terms and fees.

Cardinal Credit Union has mortgage experts available to help guide you through the mortgage process.  Call us: 440-266-2200 for a FREE consultation.

Cardinal is a member-owned, full service financial institution open to anyone who lives, works, worships or attends school in Lake, Cuyahoga, Geauga, Ashtabula, Portage, Summit, Mahoning, Trumbull or Columbiana counties.  Visit CardinalCU.com.

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