Three Things to Know When Refinancing Your Home

There are a number of reasons to consider refinancing your home. But, just like financing, re-financing is a complex transaction, so it pays to know exactly what you’re getting into. Here are three important things to keep in mind when you consider refinancing:

1. Your Goals: Why do you want to refinance? If you want to lower your payments by extending the term, lower your interest rate, or obtain cash for upgrades or other purposes, refinancing may be something you’ll want to look into.
2. Timing: If your credit score has improved since your original mortgage, your income has changed, or interest rates are in your favor, it may be a good time to look into refinancing. However, the time you plan to stay put may impact your decision. The closing costs and fees you’ll pay typically take up to three years to recover through lower payments, so if you plan to sell or think you may move in the next 24 to 36 months, staying with your current mortgage may put you money ahead.
3. Private Mortgage Insurance: If you have less than 20 percent equity in your home at refinancing, you’ll be required to purchase PMI. If your home has dropped in value since the purchase date, PMI may be a requirement to refinance, and you’ll need to factor that into your monthly payment. The added cost will dilute your gain from a lower mortgage payment, or it may even eliminate it altogether, so this is important to know going in.

In short, mortgage refinancing is a complex transaction and requires due diligence on your part. First National Title Company can help. Independently owned and operated, we have a staff of highly trained and experienced professionals at 10 locations across the state ready to serve you.

Don’t go it alone. Call the location nearest you at the bottom of the page and put First National Title Company in your corner.