Mortgage Refinancing 101: When and How to Explore Your Options

Your house is an asset that can support your financial wellbeing if you know your options. Similarly, your mortgage is more than a monthly loan payment. Refinancing your mortgage can provide opportunities to save money and can also support other financial goals.

Refinancing your mortgage can make sense for many reasons, number one being if mortgage rates are lower now than when you purchased your home. Mortgage rates rise and fall with market forces. When rates drop, it is a prime opportunity to explore your options if you are looking to shave dollars from your monthly expenses and minimize the amount of interest paid over the life of the loan. Another way to boost your ability to direct more money toward savings through refinancing your loan is to rid yourself of private mortgage insurance (PMI). PMI is typically dropped automatically once your loan balance drops below 80% of the total purchase price. Many people don’t know that it’s possible to remove this fee earlier, if the appraised value of your home reflects a higher equity than its original sale price. If you don’t have the cash on hand for a home improvement project but have accrued equity in your home, refinancing is a means to put dollars toward reinvesting in your home’s value. But before you make any mortgage moves, there are a few things to know ahead of time to make the process smooth and successful.

Questions to Answer Before You Refinance

1. What is your current mortgage rate, term and payment?
2. What is your current credit score?
3. How much equity is in your home?
4. How long do you plan to live in your home?
5. Do you plan to pay the closing costs on refinancing upfront or over time?
6. What is your financial goal driving the choice to refinance?

Once you have answered these questions, you can begin to explore your options to refinance. At RadiFi, we offer many types of loans based on your personal financial goals and reasons for refinancing your home. No matter what type of loan you choose, the process is the same.

Steps to Select a Refinance Loan

1. Do your research. There are a variety of loan refinancing options available. Each type of loan is designed around different financial needs and goals, and it is important to make sure you choose the right option for your objectives.
2. Review the estimate. When reviewing your Loan Estimate Document pay attention to the closing costs and fees, in addition to the loan term and interest rate. Our mortgage refinance calculator can be a useful tool in helping determine how the rate will alter your monthly mortgage payment.
3. Discuss your options and apply for your refinance loan. Once you choose a refinance lender, you can apply online or meet in person. An in-person meeting has its benefits. You can explore opportunities that may not be online, like locking in your interest rate. This way if there is a shift in the market through the closing process, you will still lock in the original loan rate. At RadiFi, we have team members ready to discuss your best options. Finding a trusted lender is vital to your success, because refinancing your home is a big decision.

At RadiFi, our mission is to empower our members to dream big and to support them in making their goals a reality. We tailor our services to your unique needs and walk you through the process every step of the way. When refinancing your mortgage, it should feel more like a partnership than a transaction, because you’re not buying a house — you are investing in your home and your financial future.