Should You Refinance Your Home Loan?

Thinking about refinancing your home? Wondering what the benefits are? Is it worth the effort? We’re here to answer all of your questions when you’re considering refinancing.

There are many benefits to refinancing your home. Every situation is unique and it’s important to be sure that it’s the right time to refinance. If any of these situations apply to you, it might be the right time to consider refinancing:

  • There’s been a significant rise in home prices for your area. Refinancing would allow you to take advantage of your home’s increased equity. This would allow you to shorten the length of your loan while still making the same or comparable payment amount.
  • Mortgage interest rates are falling. If market rates drop as little as 1/2 percent below your current interest rate, it could be a very good time for you to refinance your home. This would lower your monthly payments while keeping the same or comparable repayment term.

Remember, if you’re still early in your mortgage term, your payments are mostly going toward interest. Refinancing usually offers more benefits later in the life of the mortgage, when your payments are going more toward the principal than the interest.

It’s important to consider all factors, such as how long you plan to stay in the home before refinancing.

Contact one of our Mutual of Omaha Mortgage home loan experts today to determine if refinancing can help you meet your long-term financial goals.

Consider All Your Options

There are couple options you’ll want to consider when it comes to refinancing your home loan:

  • Fixed Rate: Gives you established and predictable monthly mortgage payments
  • Adjustable Rate: After an initial introductory rate, your interest rate may change with the movements of the market index to which it is linked

How Does Refinancing Work?

When you refinance your mortgage, you pay off your existing loan with a new loan that usually offers a better rate or a shorter term. This provides you savings over the life of the loan and can also provide immediate benefits to your current financial or personal situation.

Here’s how it works:

  • Documents: Verify that you have the documentation needed to move forward into closing.
  • Credit: Review your credit history. Ensure that you have a good credit standing and that you understand how your credit score is calculated.
  • Insurance: Confirm that your insurance policies provide the appropriate coverage for your home’s value and contents. Also, double check that the policy reflects the name of your refinance lender as the payee for losses.
  • Rate: Consult with your Mutual of Omaha Mortgage loan officer about locking in your interest rate before you close. Locking a rate before you close will provide protection for you if rates should rise before your closing date.
  • Escrow: Examine your current loan’s escrow account and determine if a surplus or deficiency of funds exists.
  • Closing Costs: Plan to bring a cashier’s check, made out for the exact amount you’ll need, to your closing appointment.

Your Mutual of Omaha Mortgage loan officer will work with you to ensure the process is smooth and efficient, and will be with you every step of the way.

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