Thursday, 18 February 2016
Maybe things were different back when you originally bought your home, and now you've decided you'd like to refinance.
Refinancing requires patience, organization, and copious amounts of paperwork but when you're successful, you can get a lower interest rate, shorten the term of the mortgage, tap your home's equity, convert the type of loan, or consolidate debt through refinancing.
Joshua Askins, BBVA Compass senior vice president and regional mortgage sales manager, Mortgage Lending, says that as a rule of thumb, if you can reduce your interest rate by a half to one percent or more, it may be worth the effort to refinance. "I would suggest they do shop around, because like anywhere else, every company doesn't have the same interest rate. Absolutely get the best that you can get," he says.
When weighing the decision to refinance, it's critical to understand how much the everything will cost you and how long it takes to recover those fees. Generally, it's between three and six percent of the loan amount. You can ask your loan officer to outline the various options available to you.
Sometimes the refinancing process drags on for longer than you expected, and you'll be required to update your documents or send them in multiple times. Askins says one of your biggest assets in this case is patience. "Because regardless of where you go, it is going to take time to process. And at times it's frustrating."
Find more information that can help you survive your re-fi in the infographic below, and check out our tips for refinancing.
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