When you refinance your mortgage, you replace your current mortgage with a new loan. The new loan might have different terms—moving from a 30-year to a 15-year term or from an adjustable rate to a fixed rate, for example—but the most common change is a lower interest rate. Refinancing can allow you to lower your monthly payment, save money on interest over the life of your loan, pay your mortgage off sooner, and draw from your home’s equity if you need cash for any purpose.
At Funding Opportunities America, we're committed to helping you refinance with the lowest rates and fees in the industry today. Continue reading below to learn more about refinancing and check out our FAQ.
When should I refinance?
It's generally a good time to refinance when mortgage rates are 2% lower than the current rate on your loan. It may be a viable option even if the interest rate difference is only 1% or less. Any reduction can trim your monthly mortgage payments.
Example: Your payment, excluding taxes and insurance, would be about $770 on a $100,000 loan at 8.5%. If the rate was lowered to 7.5%, your payment would then be $700. Now, you're saving $70 per month.
Your savings depends on your income, budget, loan amount, and interest rate changes. Your trusted lender can help you calculate your options.
Should I refinance if I plan on moving soon?
Most lenders charge fees to refinance a loan. So, if you plan to only stay in the property for a couple of years, your monthly savings may not accumulate to recoup these costs.
Example: A lender charged $1,000 to refinance your loan that resulted in saving you $50 each month. It would take 20-months to recoup your initial costs.
Some lenders will charge a slightly higher than average interest rate on refinance loans, but will waive all costs associated with the loan. This will depend on the interest rate on your current loan.
How much will it cost to refinance?
Starting with an application fee of $250-$350, you may need to pay an origination fee—typically 1% of your loan amount.
In most cases you will pay the same costs you had with your current home loan for the title search, title insurance, lender fees, etc. The total sum could cost up to 2-3% of the loan amount. If you don’t have the funds to pay for associated loan costs, you can search for lenders that offer "no-cost" loans which will charge a slightly higher interest rate.
To meet the unique and specific needs of each client, Funding Opportunities America has relationships with over 50 lenders which provide a wide array of products, investment tools, and mortgages. Our specialized system for finding, selecting, locking while watching and searching, and closing options provides unparalleled optimization. Funding Opportunities America will present options for you to select the best loan rate, the lowest closing costs, and the best lender incentives available on the market for you and not the bank!
Contact Us with any questions about Refinancing and one of our trusted Loan Officers will be happy to assist you.