As mortgage rates keep plummeting to new all-time lows, homeowners are grabbing hold of opportunities to reduce their monthly payments and total interest costs.
The unprecedented rate drop has more than doubled the number of mortgage refinance applications compared to a year ago. When you refinance, you get a new home loan with new terms, and you pay off your existing mortgage.
Are you a good candidate to refinance? Look for these six signals that the answer is yes.
1. You could do much better than your current interest rate
2. Your break-even point is reachable
3. Your job feels secure
4. Your credit score and DTI ratio are where they should be
5. A refi will work well within your overall budget
6. Your home equity is good
Refinancing a mortgage is a personal decision. It’s a great way to cut costs and make room in your monthly budget. Just be certain you’ve got the stuff to qualify for the loan and that you’ll stay in the home long enough to actually save money.