Could You Benefit from Refinancing Your Home Loan?

Market rates are hovering near historic lows, and as a homeowner, you must determine whether a mortgage refinance makes economic sense for you and your family. Benefits of refinancing your home loan could include:

Lower monthly payment If you plan to stay in the home long enough to break even on the refinance costs, a lower interest rate and payment will result in greater monthly cash flow.

Shortening the amortization period. If your lower interest is substantially lower than your previous rate, you might want to consider shortening the term of your loan in exchange for a slightly higher mortgage payment. Before you do this, figure out if you could invest that extra principal portion elsewhere for a better rate of return.

Are you interested in refinancing your home loan? Here are a couple of things to keep in mind:

Information for Refinancing Your Home Loan

Your Debt-to-Income Ratio – Your DTI is calculated by dividing your total income by certain debts you have, such as your principal and interest mortgage payment, property taxes, and homeowners insurance (PITI); any credit card or unsecured debt payments; student loan payments, and any vehicle payments. If the monthly payments for those debts take up more than 45% of your income, you will not qualify for a loan.

Your Loan-to-Value Ratio– Your (LTV) is another important component for qualifying for a loan. Your LTV is calculated by taking the current market value of your home (what you can sell it for in today’s market) and dividing it by the balance on your mortgage or mortgages.

Your Credit Score – Your credit score is an important factor in getting you the best possible rate.

Whatever your reasons, The Mortgage Guys Atlanta want to be the team you trust and come to with all of your mortgage and home refinancing questions. Give us a call and we’ll do whatever we can to give you the best rate possible.

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