You can have multiple reasons for refinancing your mortgage, such as a change in your financial circumstances or to cash in on a dropping interest rate. You’ll need to choose wisely on your refinancing to get the best deal. At HMQ Loans, we can help you with New Jersey refinance.
What is mortgage refinancing?
Every mortgage comes with its own terms. These include the duration you have to pay it off and the interest rate, often set with fixed-rate conventional loans. Refinancing is simply replacing your old mortgage plan with a new one with different terms or interest rate. So, you’re refinancing when you have equity in the property (the difference between the amount you owe to the mortgage lender and your home’s worth).
The most common reasons for refinancing include taking advantage of falling interest rates, decreasing monthly payments, or changing mortgage companies. However, you can’t merely jump to refinancing the minute interest rates start falling. Refinancing doesn’t suit everyone’s circumstances. It is best to talk to your existing mortgage company or others to see if there’s a deal that suits your expectations.
It can be quite a challenge to work out if refinancing will save you money in the long run. It comes with its own costs such as penalty fees, paperwork costs, additional closing costs, etc. Working with a mortgage broker can help save you time and effort in finding a good refinancing deal. Our company can help those needing support for New Jersey refinance.
Reasons you should refinance
In some mortgage plans, such as 30-year fixed-rate conventional loans, your interest rate will remain the same for a really long time. Interest rates fluctuate quite a lot within this time frame, which means you could be missing out on some lucrative interest rates. For example, if you took out a $300,000 fixed loan for 30-years, a 1.5% reduction in the interest rate can reduce your monthly mortgage payments by more than $250.
If you’ve settled for an Adjustable Rate Mortgage (ARM), refinancing to a Fixed Rate Mortgage is a great way to enjoy low-interest rates. ARMs initially start out with low-interest rates, which is excellent if you have financial constraints. After a set period, the interest rate jumps to a higher rate (higher than for a fixed-rate loan). So, usually, people convert to a Fixed Rate Mortgage before this reset period.
Why should I use a mortgage broker for refinancing?
Usually, with refinancing or mortgage hunting in general, you’ll spend a great deal of time shopping around for the best deals from different lenders. A mortgage broker is like a one-stop-shop for your mortgage needs. You give them all the relevant information, and they do the shopping around for you.
They have connections to many different lenders, so they are in the best position to find a great deal. They can also help you do the math on whether refinancing is worth it based on your circumstances.
Looking for a mortgage broker for New Jersey refinance? Leave all the time-consuming shopping around to HMQ Loans!