Whether or not you should refinance your home depends on a variety of factors. Some factors you should take into consideration are the length of your remaining mortgage and your future financial goals. If you're paying a high interest rate, refinancing could allow you to take advantage of lower rates and save money over the life of your loan. If you plan to move in the near future, the costs associated with refinancing may outweigh potential savings. For those looking to remain in their homes for the foreseeable future, refinancing your home might be right for you!
Identify whether you want to lower payments, shorten the loan term, access equity, switch loan types, or remove PMI.
More equity improves loan terms, with 20% equity preferred to avoid PMI.
Choose between a traditional refinance for better terms, a cash-out refinance for equity access, or a HELOC for flexible borrowing.
Expect closing costs between 2% to 5% of the loan amount, including appraisal and lender fees.
Traditional Refinance
This replaces your current mortgage with a new one that has a lower interest rate, a different loan term, or both. It helps reduce monthly payments or pay off the loan faster without taking out extra cash.
Cash Out Refinance
Allows you to refinance your mortgage for a higher amount than what you currently owe, receiving the difference in cash. It's useful for major expenses like home renovations, debt consolidation, or investments, but it increases your loan balance.
Home Equity Line of Credit (HELOC)
Instead of replacing your existing mortgage, a HELOC functions as a second loan, giving you access to a revolving line of credit based on your home’s equity. You can borrow as needed, making it ideal for ongoing expenses or emergency funds.
Ed Fussell NMLS #309042
Mercantile Mortgage Corporation, a div of Bankers Residential Mortgage Corporation
NMLS #1657876
Mercantile Mortgage
1401 N. CENTRAL EXPRESSWAY SUITE 100
Richardson, TX 75080
Company Phone:
(972) 661-9988
Operation Manager Cell:
(972) 333-9914
Bankers Residential Mortgage Corporation DBA Mercantile Mortgage Corporation is an equal housing lender. This is not a commitment to lend or extend credit. Programs, rates, terms and conditions are subject to change without notice. Terms and conditions apply. All rights reserved. Contact us for details. Consult your accountant about tax deductions.
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