What are the Top 5 reasons to refinance your home?

5 reasons to refinance your mortgage right now

  • #1 To lower your interest rate and monthly payment. …
  • #2 To finance renovations and home upgrades. …
  • #3 To get rid of mortgage insurance. …
  • #4 To consolidate debts and loans. …
  • #5 To buy an investment property. …
  • So, should you refinance your mortgage?

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Also, do you have to put a down payment when you refinance?

More often than not, you don’t need to put down money to refinance your mortgage. In the typical rate-and-term refinance, which lowers your interest rate and payments and/or shortens your loan term, lenders generally look for an 80 percent loan-to-value ratio (LTV) or lower and solid credit, not money down.

Then, do you need an appraisal for a refinance? Most lenders require that you get an appraisal or other form of home valuation before you refinance a mortgage. An appraisal assures the lender that they aren’t loaning you too much money for your property. You may not need an appraisal to refinance your loan if you have an FHA loan, VA loan or a USDA loan.

Secondly, how long should you stay in your house after refinancing?

How long after refinancing can you sell your house? You can sell your house right after refinancing — unless you have an owner-occupancy clause in your new mortgage contract. An owner-occupancy clause can require you to live in your house for 6-12 months before you sell it or rent it out.

What is the pros and cons of refinancing?

The Pros and Cons of Refinancing

  • Pro: Most likely you can lock in a lower interest rate. …
  • Con: Depending on your current rates, the savings may be minimal. …
  • Pro: This is a great time to move a 30-year term to a 15-year term. …
  • Con: Refinancing takes time. …
  • Pro: You might be able to pull cash out of the equity you’ve built.

What should you not do when refinancing?

10 Mistakes to Avoid When Refinancing a Mortgage

  • 1 – Not shopping around. …
  • 2- Fixating on the mortgage rate. …
  • 3 – Not saving enough. …
  • 4 – Trying to time mortgage rates. …
  • 5- Refinancing too often. …
  • 6 – Not reviewing the Good Faith Estimate and other documentats. …
  • 7- Cashing out too much home equity. …
  • 8 – Stretching out your loan.

When you refinance your home do you lose your equity?

The equity that you built up in your home over the years, whether through principal repayment or price appreciation, remains yours even if you refinance the home. From the lender’s perspective, it all comes down to how the home appraises in the refinancing.

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