Owning your home is a great long-term investment. Even though the housing market has taken a big hit in the last five years, there have been some positive effects for homeowners. Specifically, interest rates have plummeted, allowing for more affordable loans. Because of this, refinancing your mortgage is a great way to save a significant amount of money each month.
How Does Refinancing Work?
Refinancing your mortgage works very much like obtaining a home loan. In fact, refinancing is essentially just changing the terms of your existing loan. You will secure a new loan in the same amount that you currently owe, ideally at a lower rate. If your home is worth more than the remaining balance on your loan, you may be eligible to obtain some money through that equity. We’ll discuss that in more detail below.
To begin the process, you will need to contact an SECU representative. Your banking representative will request an appraisal of your home in order to ascertain your home’s value. They will also run a credit check for you and any co-signers to the loan. Once it has been determined that you are eligible for refinance, an interest rate will be secured and your SECU representative will begin the process of securing the loan. Typically, you will close on the loan about thirty days later.
What Are the Benefits?
The primary benefit of refinancing is obtaining a lower interest rate. This will significantly lower your monthly payment. As mentioned above, you may also be able to secure the equity you have in your home as collateral for other projects.
Deciding to refinance is a personal decision based on your financial needs. There are factors to consider such as the closing costs you will incur, which your SECU representative can help you understand.
SECU offers great low rates for both mortgages and home equity loans. Our application process is easy and we will help you every step of the way. If you are interested in discussing your eligibility for a mortgage refinance, contact your SECU branch or learn more here.