Is Refinancing Right For You?

Many factors should be considered when determining if refinancing is right for you and your current financial situation. Speaking with a local Regions Mortgage Loan Originator regarding your reason for refinancing can help you make the decision if a refinance is the best option for you and ensure you pick the product option that best fits your needs.

Conventional Refinancing

Why do most customers refinance?

There are many reasons why people consider refinancing: getting a lower interest rate to reduce their monthly payment, reducing the term of their loan from 30 to 15 years, or even taking advantage of any equity in their home so they can do improvements or pay off other debts.

While there may be other reasons to consider refinancing, these are the primary reasons we see. Of course, it's best to talk to a Mortgage Loan Originator to discuss options that are right for you, if you qualify and what product is best for your needs.

If I am refinancing to obtain a lower rate, is there a target I should look for?

Typically you want to aim for a rate decrease of at least 1 percent. However, you may want to consider less of a decrease depending on your situation, including whether you are moving from a variable to fixed rate, and how long you intend to remain in your home. The best thing to do is discuss your situation with your Mortgage Loan Originator who will give you information that can help you make the right decision.

If I am refinancing to lower the term of my loan, what should I know?

The goal of reducing the term of your loan is to pay off your property more quickly. Do you think you can afford an increase in your monthly payment? If so, and you want to pay off your loan quicker, you could consider refinancing to lower the term of your loan. But because our interest rates are historically low, you may be able to refinance to shorten the life of your loan AND reduce your monthly payment. Again, a local Mortgage Loan Originator will be able to best help you consider your options.

If I am refinancing to take advantage of equity in my home in order to pay debt, make home improvements, etc., what should I know?

If you have equity in your home (i.e. you owe LESS than what your home is worth), you may be able to qualify for a "cash-out" refinance. This basically means you will be able to draw out the equity you have in your home. Typically homeowners do this for home renovation projects or to pay off debts. To avoid the additional costs of private mortgage insurance, you should make sure to keep the loan-to-value ratio for your mortgage loan at or below 80 percent. A Mortgage Loan Originator can evaluate your situation and help you to make an informed decision as to whether or not you should consider cashing out your equity on your home.



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