There are many reasons to refinance a home, including but not limited to, reducing debt, building onto a home, or reducing the length of your mortgage. There are many factors to consider when deicing if you should refinance your home. Some of those factors may be the value of the home, how long you have left on your current mortgage, your current interest rate, and current private mortgage insurance rates (PMI).
Homes can increase or decrease in value overtime. The upkeep of a home, age, square footage, as well as costs of nearby, similar homes, can determine how much your home is worth. Home appreciation or depreciation can dictate if a refinance is a good idea. Generally, homes that appreciate are in good condition, and in areas with homes that sell for equal to or higher than your home’s value. Homes that depreciate may include those in areas that are not as popular as they once were or not in overall good condition, which can decrease a home’s overall value per square foot.
The amount of time you have left on a current mortgage may help you in making the decision to refinance or keep the mortgage as is. Sometimes reducing the length of your mortgage can increase your payment but decrease the amount of interest you pay over the new mortgage period. Also, the interest rate and private mortgage insurance (PMI) may have decreased since you bought your home. It may make sense to review your mortgage terms and current market offerings to see if you qualify for better terms.
Before refinancing your home, it may be a good idea to contact an experienced real estate attorney. He or she may be able to review your existing mortgage documents with you and help make sure you have a good understanding of them.
If you have questions about refinancing your existing mortgage, contact us today.
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