Expect closing cost
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.
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.
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%. Other products, such as FHA loans might accept a higher ratio, although lower is generally better for refinancing.