How to Maximize Mortgage Refinancing

How to Maximize Mortgage Refinancing

Owning a new home can be a very rewarding experience, learning How to Maximize Mortgage Refinancing can help with this experience. There is nothing like cooking in your own kitchen or catching some rays out on your patio or deck. However, over time the honeymoon period can start to fade and you begin to wonder about ways to improve your home that can accommodate your particular lifestyle. Apply for a home refinance loan to see what mortgage plans are available for you today.

But did you know that whether you have lived in your home for a year or several years, by refinancing your mortgage you may be able to pay for some of those new upgrades you have come to crave?

Not only that, but consider that mortgage rates are always changing. If you opted for a fixed rate mortgage that was written quite some time ago, you quite possibly could be missing out on opportunities to reduce your monthly mortgage payment or accelerate paying off your loan.

Many borrowers just like you have utilized a mortgage refinance to either obtain better financing terms or access the available equity in their home for projects such as home improvements, debt consolidation, or other investment opportunities.

If we review How to Maximize Mortgage Refinancing, what it really involves and review some of the benefits that New Century Mortgage can provide to help you maximize your refinance transaction.

What Does Refinancing Really Mean?

Refinancing can seem like a complicated concept, but it is actually quite simple. Essentially when you refinance you are paying off your existing mortgage and replacing it with a new one. The new loan will be subject to new repayment terms.

Also, since market conditions, income streams, and credit profiles are dynamic, changing over time, the new loan is subject to current eligibility requirements. But, don’t be intimidated about applying for new credit. Conventional financing has evolved and preferred lenders like New Century Mortgage have streamlined the mortgage application process to make getting a new mortgage as painless as possible!

There are several ways we save you time and headaches throughout a new refinance mortgage application.

We may be able to obtain a property inspection waiver for your application. Property inspection waivers (PIW), also known as an appraisal waiver, allows you to refinance without having to obtain a new appraisal for your property. Since an appraisal can be both time consuming and expensive, a PIW can really expedite your loan’s approval.

New Century Mortgage is also a full-service lender. This means we can help speed up certain refinance applications through the use of a streamlined refinance offering. Streamlined refinance is offered for existing FHA and VA loans that allows for limited borrower credit documentation and underwriting. It can also help minimize the overall costs you have to pay to complete the transaction.

The Benefits – How to Maximize Mortgage Refinancing

Refinancing can truly be a beneficial solution for many borrowers depending on your overall financial goals. While there are still costs associated with taking out new credit, overall refinancing can have some tremendous upside.

Here are some of the tangible benefits to consider to help you maximize your refinance transaction: 

  1. Lower Your Interest Rate
  2. Adjusting Your Repayment Period
  3. Switching from an Adjustable Rate to a Fixed Rate
  4. Accessing Equity for Home Improvements or Other Projects
  5. Potential Tax Deductions

Lower Your Interest Rate – How to Maximize Mortgage Refinancing

Your interest rate has a direct impact on how much your monthly mortgage payment will be. Lower rates can mean a lower payment (although that isn’t always the case).

Changes to market conditions, to your income, or even your credit score may allow you to obtain a more favorable interest rate than you already have, potentially lowering your monthly mortgage payment.

Adjusting Your Repayment Period – How to Maximize Mortgage Refinancing

We offer mortgages solutions with a variety of terms to choose from. Choosing to extend your repayment period through a mortgage refinance may lower your overall monthly payment. You may also decide to shorten your repayment period, possibly for a better interest rate, as a way to accelerate the payoff of your loan.

Switching from an Adjustable Rate to a Fixed Rate

Adjustable rate mortgages can be tricky to understand. Essentially your interest rate can change over the course of your loan’s repayment period. As your interest rate changes, your monthly payment may increase or decrease accordingly.

For those that are uncertain about market conditions or want a more predictable monthly repayment schedule, consider using a refinance to switch from an adjustable rate to a fix rate solution.

Accessing Equity for Home Improvements or Other Projects

One of the most common reasons borrowers refinance is to utilize available equity in their home for home improvements or other projects. The scope is a pretty wide as to what you can use your home’s equity for.

Some borrowers want to complete small- or large-scale remodels. Others may be looking to payoff and consolidate higher interest consumer and student loan debt. You can also take cash out for starting a business or miscellaneous investments or expenses.

Just make sure to discuss the purpose of our cash out refinance with your lender prior to applying.

Potential Tax Deductions – How to Maximize Mortgage Refinancing

While not always the case, some refinances come with potential tax deductions at the end of the year when you go to file your tax return. Some costs, such as mortgage interest, points, and property taxes paid at closing may be deductible. You may also want to inquire about depreciation if it is an investment property.

In conclusion, these are a few ways on How to Maximize Mortgage Refinancing, this article may not apply to everyone. As your situation may be different than others. Please seek the advice of your CPA.

Further interest in learning more about the potential tax benefits to refinancing, we encourage you to discuss these with a professional tax advisor.