When interest rates drop, it is tempting to refinance your home. However, knowing the best time to refinance your home is important; refinancing may not be the right answer after you factor in costs, the possibility of a longer-term mortgage and your credit rating.
First, the costs of refinancing your home must be taken into consideration. Keep in mind, no-cost loans are not really no cost, the costs are simply rolled into your interest rate. Borrowers need to determine what the costs associated with a new mortgage are and determine how long it will take to recover those costs. In general, if you are planning on living in the same home for less than five years, it may not be the best time to refinance your home.
When you are trying to decide when to refinance your mortgage, another common consideration is interest rates. While many lenders encourage borrowers to consider refinancing when rates are one percent lower, in some cases, it may be better to wait until they have dropped two points. Naturally if your current mortgage is adjustable, a fixed rate could be more beneficial, even if the percentage is only modestly lower. This change can protect you from future rate increases.
Keep in mind, if you have had your mortgage for five or more years, you may want to consider a shorter-term mortgage. for example, if you are refinancing a 30-year loan and you can refinance to a 20-year mortgage, you will be shaving additional years off your mortgage. Typically, a 20-year loan also offers lower interest rates.
If you are trying to decide when to refinance your home, you should also know when you should avoid refinancing. Some of the reasons to avoid refinancing may include:
Any one of these situations can mean you should consider holding onto your current mortgage. If you are thinking about refinancing, speak with a representative at Federated Lending Corporation (FLC) first. We help homeowners all over Bucks County, PA with a broad range of mortgage products.
Kristen Katzianer
Easy process from start to finish
Easy process from start to finish. The underwriter should make more money.
Shawn Cannon
Second time working with Vince
Second time working with Vince. Have had nothing but great experiences. Highly recommend!!
Katie Novak
Federated Lending was a great mortgage…
Federated Lending was a great mortgage company to work with! We were able to ask questions and get immediate answers.
Patrick Mallon
Federated Lending has great customer…
Federated Lending has great customer service, a very knowledgeable staff, and made re-financing an effortless experience.
Mike Pawlikowski
Federated Lending comes through again
Federated Lending comes through again. Tom K. and Federated Lending team helped me through the process of getting my original mortgage and now again with the refinance. They made the process very easy and I am extremely happy with the end result. I would strongly recommend if your looking for a mortgage or refinance that you reach out to the Federated Lending Team.
Jorge Figueroa
Federated Lending Is Fantastic and Honest
This was such an easy transaction. What is probably the most stressful thing to do Andy and his Team made this absolutely seamless. Everything was done perfectly and right on time. Zero issues at the closing table and it all went exactly as it was explained. I was prepared for so many things to be a push up and there was none of it. NONE! I cannot say enough ...
Megan Detwiler
We were happy with our experience. Initially there was a step missed that caused a slight delay, but we couldn’t be upset because it ended up getting us a lower rate overall. We were able to sign the documents in the comfort of our own home which was super convenient and appreciated. Would recommend!
Bart Cerami
Andrew Larson and Federated Lending made refinancing my home simple, and saved me a lot of money in the process. And Andy continued to assist me after the closing when I had a question regarding my local tax payment. I have already recommended him to several of my friends and will continue to do so. Thanks Andy!!
Elaine Punchello
I've trusted Federated Lending multiple…
I've trusted Federated Lending multiple times for my home mortgages. They make what can be a difficult process easy to get through. I've never had a delay in a settlement because of my mortgage, which is a frequent issue with other lenders. I'll continue to use them and recommend them. Thanks!
Jacob Desperak
Wonderful and easy experience!
My wife and I had a very good experience with Fedlend thanks to Andy and Kathy. We couldn’t be more thankful for all the help and guidance we received along the way. Would definitely recommend to all home buyers, as we will use Fedlend for our next purchase or refinance.
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