Craig Rohden
President/CEO

A Message from the President

Is It Time to Refinance Your Mortgage?
Refinancing is the process of paying off an existing loan with the proceeds from a new loan, and using the same property as collateral. Usually, the interest rate on the new mortgage will be less than the old, the loan will cost less and you will save money. However, refinancing isn’t appropriate for every homeowner. To know if it’s right for you, understand how these arrangements work.

The benefits:
Many people choose to refinance because the reduced interest rate decreases their monthly mortgage payment, freeing up cash for other expenses. Another reason to refinance is to repay your mortgage faster, which is done by switching a long-term loan for one with a shorter term. With it, your mortgage payment would be higher, but you’d pay much less in interest over the life of the loan while building equity more quickly. Cash-out refinancing is yet another attractive option. With this type of loan you’d refinance your current mortgage plus take out some cash from the equity you’ve built up. 

The costs:
To determine if refinancing will work in your favor, you’ve got to weigh the savings in interest against the fees associated with refinancing. A new loan means you’ll have to pay most of the same costs you paid the first time around. These may include points, appraisals, attorney’s fees (in Attorney states), settlement costs (such as fees for the loan application, title search, appraisal, loan origination, and credit check), recording fees or transfer taxes, and sometimes a pre-payment penalty. All totaled, these costs can be high, and some lenders require at least a portion of them be paid at the time of application.

So is it time to refinance your mortgage? If you will come out ahead financially, then it is definitely worth considering. However, if the difference is minimal or nil, then save yourself the time and trouble. Refinancing is not the answer for everyone.

If you haven’t refinanced in a while, or ever, chances are you can save some money because rates are at historical lows. Contact one of our loan officers today and see if refinancing is right for you.