Is It A Good Time to Refinance the Mortgage on Your Maryland House?
With interest rates hitting all-time lows over the past few weeks, many homeowners are opting to refinance their Maryland homes. Have you been thinking about it?
To decide if refinancing your home is the best option for you…start by asking yourself these questions:
Why Do You Want to Refinance the Mortgage on Your House in Maryland?
There are many reasons to refinance, but here are 3 of the most common:
- To Lower the Interest Rate
This is the most popular reason why homeowners in Maryland are refinancing the mortgage on their houses. Is your current interest rate higher than what’s available today? If so, it might be worth seeing if you can take advantage of the current lower rates.
- To Shorten the Term the Loan
If you have a 30-year loan it may be advantageous to change it to a 15 or 20-year loan to pay off your mortgage sooner rather than later.
- To Cash-Out Refinance
You might have enough equity to cash out and invest in something else, like your children’s education, a business venture, an investment property or simply to increase your cash reserve.
What Does it Cost to Refinance Your House in Maryland?
Once you know why you might want to refinance, ask yourself the next question…How much is it going to cost? There are fees and closing costs involved in refinancing.
The Lenders Network explains it very well as follows…
“As an example, let’s say your mortgage has a balance of $200,000. If you were to refinance that loan into a new loan, total closing costs would run between 2 and 4 percent of the loan amount. You can expect to pay from $4,000 to $8,000 to refinance this loan.
The Lender’s Network
They also explain there are options for no-cost refinance loans… but be on the lookout…a no-cost refinance loan is when the lender pays the closing costs for the borrower. However, you should be aware that the lender makes up this money from other aspects of the mortgage, usually charging a slightly higher interest rate so they can make the money back.
How Long Does it Take to Refinance the Mortgage on a House in Maryland?
Typically, it takes 30 – 45 days to go through the complete process of refinancing a house in Maryland. Keep in mind that given the current market conditions and how favorable they are for refinancing, it can take a little longer to execute the process today. This is because many other homeowners are going this route as well.
Is Refinancing a House in Maryland Worth It?
Clearly, refinancing has been on the rise lately. If you’re comfortable with the upfront costs and a potential waiting period due to the high volume of requests, then ask yourself one more question…Is it worth it? To answer this one, do the math. Will it help you save money? How much longer do you need to own your home to break-even? Will your current home meet your needs down the road? If you plan to stay for a few years, then maybe refinancing is your best move. If, however, your current home won’t fulfill your needs for the next few years, you might want to consider using your equity for a down payment on a new home instead. You’ll still get a lower interest rate than the one you have on your current mortgage and with the equity you’ve already built you can finally purchase the home you’ve been waiting for.
Who Should You Talk to For Guidance?
Today more than ever, it’s important to start working with a trusted real estate adviser. Whether you connect by phone or video chat, a real estate professional can help. Melissa Spittel can help you safely navigate the housing market so you can prioritize the health of your family without having to bring your plans to a standstill. Whether you’re looking to refinance, buy or sell, a trusted adviser knows the best protocol as well as the optimal resources and lenders to help you through the process in this fast-paced world that’s changing every day.
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