Many homeowners believe that refinancing their home mortgage is an excellent idea. However, you should know when is the right time to do it. Real estate experts, like Michael Eisenga, say for those who have a newly improved borrowing power or those, who do not plan to move anytime soon, it may be a smart idea to consider a refinancing deal.
Mike Eisenga, a successful commercial real estate investor, is the President of both American Lending Solutions, a mortgage lending company (he founded and operated from 2000 to 2018), and First American Properties. He has a track record of creating and running successful businesses. Eisenga offers several questions for anyone to answer to help figure out how to refinance your mortgage at the right time.
How Does the Refinancing Process Work?
There are multiple different avenues to take when seeking to refinance your mortgage. It is vital to sit down and determine your overall goals before deciding on the right loan for you. There are options such as making the change from an adjustable-rate mortgage to a fixed-rate loan with a regular monthly payment. Another choice may be shortening a loan’s term from a thirty-year to a fifteen-year, which can save a lot from wallet-draining interest charges.
Refinancing your mortgage can also assist in dropping private mortgage insurance. You can get rid of private mortgage insurance once reaching twenty percent equity on your home. Though there are many routes to take when refinancing your mortgage, the majority of homeowners lean towards the alternative of a straight rate-and-term refinance. This type of refinance option lowers a loan’s interest rate and offers the gift of a convenient repayment term.
Can Refinancing Help Shorten a Loan’s Term?
Fortunately for homeowners, when interest rates fall, an opportunity opens up to consider refinancing an existing loan. What happens is that the current loan is replaced with another loan that has a drastically shorter term with little adjustments for monthly payments.
What is Considered a Good Mortgage Rate?
The Federal Reserve has the power to lower short-term interest rates. When this happens, a lot of people have the idea that mortgage rates fall in line and are reduced, as well. However, this is not always the case. Lower short-term rates don’t always go hand-in-hand with lower mortgage rates. In fact, mortgage refinance rates are forever changing on a day-to-day basis. This means that if you have your mortgage reviewed and receive a quote, that quote may fluctuate up or down compared to a rate published at any moment. A critical factor in determining your mortgage refinance rate is your borrowing power. Besides, the equity you have in your home is another large piece of the rate’s results.
How Do You Determine When it is Time to Change the Type of Loan You Have?
If you are trying to figure out whether to adjust the type of loan you currently have, start by predicting how long you will stay in your present home. Break down the details surrounding your current mortgage and consider how both situations work off one another because they might play a role in your refinance decision.
About Michael Eisenga
Michael Eisenga is a successful commercial real estate investor with a banking and finance background and is the former mayor of the City of Columbus. As a President of both American Lending Solutions, a mortgage lending company (he founded and operated from 2000 to 2018), and First American Properties, he has a track record of creating and operating successful businesses. Mr. Eisenga is also devoted to property development and construction, primarily serving smaller local communities. Especially in the senior housing sector.