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Mortgage Review

Things to Bring With You

When you meet with your banker, you will need a current mortgage statement that shows:

  1. the outstanding loan balance
  2. your monthly payment  
  3. current interest rate
  4. how much escrow (taxes and insurance) is collected monthly

If you are looking at a cash-out refinance to consolidate debt, bring current statements for the debts you would like to pay off.

Before You Refinance Your Home Mortgage

“One of my favorite parts of being a banker is helping people save money with a refinance of their mortgage loan,” says West Banker Tyler Miller. “I have been able to help customers by lowering their rate for interest savings and also with cash-out refinances to consolidate debt to help with their monthly cash flow.”

“I would recommend doing a mortgage review with your banker to ensure doing a refinance makes sense for you and your situation.  I am here to be your ally, to help educate and guide you to make a good financial decision.”

When Does a Refinance Make Sense?

When interest rates are lower than your current mortgage rate, you may be able to lower your monthly payment with a refinance. First, consider how long you intend to be in your home because the savings will be spread out over the life of the loan.

Generally, the new interest rate needs to be 0.5% lower than the original rate for refinance to make sense. Your banker should have the tools to show you what you will save over the life of your loan versus what it will cost to do the refinance.

If you are refinancing for debt consolidation and have enough equity in your home it might make sense to do a cash-out refinance to help with your monthly cash flow.

Has Your Credit Score Improved?

If your credit score has improved since purchasing your home, you might qualify for a better rate that could help you save money on your mortgage.

Are You Paying Mortgage Insurance?

Another thing to consider is if you are paying mortgage insurance. When you bought your home, if your down payment was less than 20% of the value you probably had to purchase mortgage insurance. If you have been paying on your mortgage for several years and you now have 20% equity or more in your home, private mortgage protection insurance is not required. Insurance premiums are included in your monthly mortgage payment, so if you can eliminate those, your savings will increase.

Cash-Out Refinance

Are you being weighed down by high-interest credit card debt? Do you have medical bills that weren’t covered by insurance? Do you need to do a big home improvement project? A cash-out refinance may offer a better solution than another type of loan.  Your banker can help you compare your options.

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