Financially speaking, times are tough for many Texans. Loss of income due to illness or changes in your work situation may mean that you’re looking at cutting costs, or perhaps you want to make your dollar stretch further. Whatever your personal circumstances, a mortgage refinance may be a good option to help lower your mortgage payment and lessen your financial burden in the long run.
This month, we offer some tips and advice about mortgage refinancing in 2022 so you can determine if it’s right for you.
Refinancing your mortgage is a great way to put more money in your pocket in a number of ways. It can lower your monthly mortgage payment each month which can help when money is tight or if you need room in your monthly budget for something new that’s come up. As an added bonus, the time frame involved in applying can sometimes give you a one to two-month break from having a mortgage payment, something that cash-strapped borrowers often appreciate. In addition, it lowers your APR which means that you’ll owe less money over time, which will give you the chance to pay off your home loan earlier. For some homeowners, a cash-out refinance gives them an influx of cash they can use to make home improvements or make large payments on something like medical expenses or college tuition.
Due to the pandemic that began in early 2020, many lenders came up with streamlining or refinancing programs to help lenders lower their mortgage payments or in some cases postpone payments altogether. Although many of these temporary programs have since expired, mortgage rates have been sitting at historically low levels–in some cases under 3%– for about two years. Despite the fact that mortgage rates have experienced a small uptick in recent weeks, experts believe that the rates should stay low overall for most of 2022, making early in the year a good time to consider refinancing your home.
It’s important to note that although a mortgage refinance may make sense for some, it may not make sense for everyone. There may be some situations that make 2022 an unattractive time for you to consider doing it. If you have poor credit, for example, this year probably isn’t the best time to try to qualify. You likely won’t get a rate you’ll be happy with, so it may be best to focus on improving your credit score and then applying once your score is a bit higher. In addition, if you’re in any situation that may mean a potential move is on the horizon, such as taking a new job that will cause you to relocate, refinancing is not a good idea. Finally, most of the time there are closing costs associated with refinancing a mortgage, so it may take at least a few years before you reap the benefit of any refinance. If you don’t plan to stay in your home longer than a few years, it may not be worth pursuing.
Aside from the drawbacks listed above, mortgage refinance is a sensible strategy for many people looking to save money and increase their cash equity. Although mortgage rates are historically low at the moment, they likely won’t stay that way forever, so it’s best to act soon before rates go up. While making the decision whether or not to apply for a refi, keep the following things in mind:
If you have questions about your mortgage or getting better mortgage rates, contact any of The Lippincott Team professionals. We are proud partners with Highlands Residential Mortgage who have trusted loan officers who will help find you the best rate available to you. Call us at 713-494-1818 or check us out on social!
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