Are you considering mortgage refinancing? If this is your first time doing so, there are some important things that you should know.
Today, there are numerous mortgage refinance myths circulating, making it hard to know what to expect in the process. Here, we debunk some common mortgage refinancing myths so you can stay informed as you move forward with the refinancing process.
Myth #1: There’s no reason to refinance.
Fact: Believe it or not, there are numerous reasons for you to consider mortgage refinancing. Most homeowners choose to refinance to have a lower mortgage rate, which in turn leads to lower monthly payments. You can also refinance if you want to shorten the term of your loan.
Myth #2: Most people can’t qualify for mortgage refinancing.
Fact: Many people have ‘low financial self-esteem’. Because of this, they opt out of refinancing without even finding out if they can actually qualify. Also, most people think their credit is worse than it is. What they don’t realize is that even if they do have bad credit, a lender can help them.
Myth #3: You can’t refinance with a new lender.
Fact: Most homeowners think that they have to stick with the lender they’re currently connected with. Fact is, refinancing is your chance to search for and compare lenders and mortgage rates. This allows you to get a better deal with a new lender. Also, make sure to shop around and compare loan options from different types of lenders, such as from an online lender, a mortgage banker, or your local bank.
Myth #4: If your mortgage refinancing application has been rejected once, you’ll be declined again.
Fact: Your application may have been rejected in the past. However, this doesn’t mean that you won’t be able to refinance moving forward. Many rejections are due to poor credit scores or a lack of equity. If this is the case, there’s still hope. Today, there are many ways to improve your credit score and you can build your equity using different methods.
Myth #5: It’s too late to consider mortgage refinancing.
Fact: Many homeowners think that they have already missed the ‘right’ time to refinance. However, this shouldn’t discourage you from looking into securing a new loan. Again, this will depend on your current mortgage, your finances, and if you’re planning to move. Research the market and decide whether or not you’d rather lock in a current rate for the long-term, mainly if you think interest rates will rise.
Mortgage refinancing may sound confusing and overwhelming, but with the right information, you’ll be able to see what a great opportunity it is. Don’t be misled by these common myths – do your research and seek help from a mortgage professional like the Ranieri Team if necessary. We’re here to help you!