Barbara Katsos, attorney and owner of the Law Offices of Barbara H. Katsos, PC, in New York, NY, has been practicing law for more than 20 years. During this time, Barbara Katsos has focused much of her work on estate planning and real estate matters, including leases, buying and selling a home, and refinancing a mortgage.
Below are several signs you should refinance your mortgage:
– Your credit score has improved: Rebuilding your credit can be a long process, but improving your credit score can grant you lower mortgage rates. The lowest rates are usually reserved for people with a score above 700, but you may still get lower rates with a score between 600 and 700.
– You have an ARM: ARMs, or adjustable rate mortgages, feature interest rates that rise or lower depending on market conditions. This can help you pay less each month at first, but your payments may skyrocket once the ARM adjusts. If you are worried about this adjustment, look into switching to a fixed-rate mortgage.
– Current interest rates are lower: Over time, interest rates change due to market changes. However, this may cause your interest rates to be higher than the current rates. Refinancing your mortgage lets you take advantage of lower interest rates and can save you thousands of dollars.
– Your income has increased: An increase in income can help you pay off your mortgage in a shorter amount of time. Unfortunately, you may be stuck in a 30-year mortgage due to your prior financial situation. If this is the case, consider switching your mortgage to a 15-year terms. This will increase your monthly payments, but it will also lower the total amount of interest you pay