You may have heard that refinancing could save homeowners thousands —so why are so many hesitant to see if they qualify?! There are common misconceptions about refinancing that tend to steer possible homeowners away. Consider these 4 myths about refinancing and why they should be kicked to the curb.
Myth 1: You Missed the Chance
You may have heard how the Fed is raising interest rates making you wonder if you’ve missed your chance to refinance—but don’t worry! As long as you’re clear on the costs associated with refinancing and confirm that the transaction will lower your monthly payments, refinancing can still be a great move.
Myth 2: You Won’t Qualify
Following the housing crisis in 2008, many lenders did tighten up their guidelines for mortgages. However, as the market improves, there are more opportunities for those with credit issues. The best way to find out is to talk to an expert, contact a Loan Officer to see if you qualify.
Myth 3: You Need 20% Equity in Your Current Home
Yes, lenders typically like homeowners to have 20% equity before refinancing, but there are options for those who don’t! According to Fox Business, the Federal Home Affordable Refinance Program is specifically designed to help homeowners with little to no equity. If you are a Veteran, you may also have options in getting a refinance with less than 20% in equity. You won’t know your options unless you ask.
Myth 4: Refinances are Costly
While there are costs that come with refinancing your mortgage, by the time you adopt lower interest rates and monthly payments those additional costs should be covered by the money you save down the road! Read our guide to the do’s and don’ts when refinancing and look into different refinance methods to find out what makes the most sense for your unique financial situation.
Curious if a mortgage refinance is right for you?
Sources: www.realtor.com www.foxbusiness.com