Refinancing Tips
Although the process of refinancing may seem overwhelming, with the need to schedule a meeting with a loan officer, gather all the required documents, and answer several inquiries, it is an important consideration due to the significant financial implications. Fortunately, Peoples Bank & Trust Company has a team of loan specialists who can make the process smoother for you.
If you're serious about refinancing and exploring opportunities to reduce expenses, consider reviewing the following suggestions and determine if refinancing is a practical option for your situation. Of course, if you'd like help making this decision just give us a call or complete our contact form.
Consider how long you’ll be living in your home
Have you thought about how long you intend to stay in your current residence? While refinancing can result in an initial decrease in your monthly payments, it may not necessarily lead to long-term savings. It's crucial to take into account fees and interest rates when evaluating whether your new mortgage will be cost-effective over the entire loan term. Our experienced loan officers can assist you in determining if refinancing is a suitable option for your circumstances. We can also assist you in calculating the break-even point, which is the point at which you begin to save.
Know the fees associated with your current mortgage
Are you currently paying mortgage insurance on your Conventional, FHA or USDA loan? Knowing this information will help you understand just how valuable a refinance can be. Also, knowing what your current insurance and taxes escrow payments are will help you compare apples to apples when looking at a refinance. If your escrow has a shortage, we can help you resolve this during the refinance process as well.
Know your credit score prior to applying
Before starting the refinancing process, it's advisable to review your credit report and obtain a copy of your credit score. In case you find any errors, report them, and refrain from actions that could reduce your score. A higher credit score increases the likelihood of receiving a favorable interest rate and qualifying for the best terms. We do have partners who are credit specialists that can help you improve your credit if needed. Give us a call so we can discuss this with you further.
Know your goals
By thinking through what you want to accomplish you'll have a better idea of what type of refinance program makes the most sense for you. For example, if you're looking at getting a cash-out loan, an increase in interest rate may still make sense if you're paying off higher interest credit cards or installment loans.
