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You Ask, We Answer: Why Should I Consider Refinancing Now?
What Does Refinancing Mean?
Does Refinancing Make Sense for Me?
Also, keep in mind that while rates are at an all time low—2.75% for a refinance in Connecticut—getting approved for that exact rate depends on your credit score; the better your score, the better you have at securing the lowest possible rate. Still, it’s worth discussing with your lender, as reducing your interest rate by even half a point may deliver a significant savings boost.
Are There Drawbacks to Refinancing?
Between the fees for the application, title search, title insurance and appraisal, closing costs can be significant. As mentioned above, when determining if you’ll break even on the cost of refinancing over the span of two years, these are all fees you’ll want to factor in. If closing costs will be a burden financially at this time, then refinancing may have more cons than pros right now.
Similarly, if you think you might be at risk for losing your income in the near future, especially during this economic downturn, now might not be the time to refinance. An inability to pay your mortgage may result in foreclosure or needing to move, and you won’t have recouped the cost of refinancing—resulting in a hit to your savings.
How Do I Go About Refinancing?
Once you have a better understanding of exactly what the refinance will entail and how it will affect your mortgage rates, you’ll need to provide your lender with an updated financial picture via pay stubs and tax returns, just as you did for your initial mortgage.
If you still have questions about why you should consider refinancing now, reach out to your local Calcagni Real Estate agent, who can put you in touch with a recommended mortgage lender in your area.