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    There are plenty of reasons to refinance your mortgage loan. Maybe you want a lower monthly payment, maybe you’re looking to save on interest, or maybe you just need an extra infusion of cash to remodel that spare bedroom, take a vacation or send your kid to college.

    Whatever the reason, refinancing can be a game-changer for many homeowners, putting more money in your pocket and making monthly mortgage payments easier and more manageable.

    But when exactly is the right time to pull the trigger? How will you know when you’re best poised to give it a whirl?

    When to Refinance

    Here are a few signs the time has come to refinance your mortgage:

    1. Your mortgage rate is higher than the going market rate. Mortgage rates change all the time, so check to see what the current market rate is. If your current rate is higher than that, you’re paying more interest than you need. A refinance could save you significantly in the long run.
    2. Your list of repairs is building up. If you’ve been in your home a while and repairs are just piling up, never getting accomplished due to tight funds, a refinance may be able to help. Called a cash-out refinance, this allows you to take out a loan using the equity you have in your home. You can then use these funds to pay for repairs and upgrades as you see fit.
    3. You’re nearing retirement. Though you’ll have pensions and Social Security payments after retirement, your monthly income will likely drop significantly – and it could make covering your existing mortgage payment a little difficult. Refinancing could help lower your monthly payment to make it a bit more affordable.
      1. You’ve got an FHA loan. With FHA loans, you only need a very small down payment to get approved. Ultimately, this means you’re stuck paying for mortgage insurance as well as a higher balance (and more interest) over the years. Refinancing to a conventional loan could save lots of money over the life of the loan.
    4. You’ve improved your credit significantly. If your credit wasn’t so great when you applied for your mortgage, it likely means you didn’t get the best deal with your rate. Pull your credit report and see how it’s improved over the years. If it’s a lot better, you’ll definitely want to take advantage and try your hand at refinancing.

    The moral of the story? If you need cash or you think you might be paying too much for your mortgage, refinancing could be a good option. Contact Embrace Home Loans to learn more.

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