3 Reasons Why You Would Consider a Refinance

Refinancing your home doesn’t come without its share of expenses. Just as you would expect with a purchase loan, refinancing requires borrowers to pay certain fees on the day of closing.

These typically range from 3% to 6% of the entirety of the loan being refinanced but could differ depending on your particular situation.

When in doubt, shop for the best rates using multiple lenders. On average, buyers who only look at a single lender could be missing out from hundreds in savings if they gather just one additional quote.

Reason #1: Has your credit score improved?

Your credit has a huge role in your refinance journey. Lenders use it to determine your qualifying interest rate, as well as certain closing costs that may be waived for higher scores.

If your score is lower than when you first bought your home, refinancing might have to wait, otherwise, you risk losing more points off your credit score, not to mention the hassle of applying for refinancing and ending up with near-identical terms.

Reason #2: Are your expenses lower than before?

Your debt-to-income ratio is an important factor in choosing your loan product since conventional lenders usually work with DTIs as high as 43%.

Getting your finances in order before beginning your refinance journey can help you determine if you might be better off waiting a little longer.

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