Given today's low mortgage interest rates, you may have been rethinking about refinancing your home mortgage – but you're not sure whether you should or even could. For most mortgage holders, however, there's no reason to back away from refinancing. All those reasons that are giving you pause? Most likely, these concerns are just myths and unnecessary things to worry about.
Here are some of the misconceptions people have about a refinance mortgage in Kansas City– all thoroughly debunked.
1. You Need Cash to Do It
Some people think that you need extra cash on hand to initiate a loan refinancing. While refinancing, like any loan, comes with its own closing costs and fee, you may not have to pay them in cash. In many instances, these fees can simply be rolled into your new loan, with no additional cash outlay on your part.
2. You'll Lose Your Equity
Another fear that some have is that you’ll lose the equity you’ve built up in the property if you refinance. In a normal refinance, that simply is not the case. Refinancing to get a lower interest rate does not affect your equity at all. Because equity is based on what you owe versus what your home is currently worth, you'll have the same equity after refinancing as you had before.
3. You Have to Reset Your Loan Term
You've been paying on your mortgage for several years now. That 30-year loan is due to be paid off in 20 or 15 or even 10 years. You don't want to start over with a new 30-year loan just because you're refinancing.
The good news is, you don't have to reset the term of your loan back to its original 30 years. If you only have 15 years left on your original mortgage, you can refinance for a 15-year term. You can refinance for a longer term, if you want, but in most instances, you don't have to start all over again. It’s important to note that shorter-term loans often have higher monthly payments, so you may want to go with a slightly longer loan to keep your payments down.
4. There Hasn't Been Enough Time Since Your Last Refinance
If you've been in your home for a number of years, chances are you've already refinanced at least once. Rates have consistently decreased over the past several decades, and you've probably taken advantage of those lower rates.
That doesn't mean you can't do so again. There's nothing stopping you from doing another refinance and doing it today. You don't have to wait a set number of years as you may be able to refinance as soon as six months after your last refinance.
5. It's Too Much Work
When you think about refinancing, you may think of all the work involved. Certainly getting your original loan involved a lot of paperwork, appraisals, and the like. You don't really want to go through all that again, do you?
Here's more good news. Refinancing a loan is a lot less work than getting that original loan. Depending on your lender's requirements, you may not need a new appraisal or income verification. There's still work involved, mind you, but a good mortgage broker can help minimize the time and effort you have to put into it.
Plus, whatever work you have to do is going to be worth it. A little effort today will pay off in lower interest rates through the balance of your mortgage's life. That's less money you spend each month and a ton of money total over the years. A few hour's work today pays off big in the long run.
Let the Kansas City Mortgage Guy Help You Refinance Your Mortgage
If you're thinking about refinancing your home mortgage loan, talk to the Kansas City Mortgage Guy. We can help you find the best loan with the best rate, with the least amount of hassle. You'll save time and money – and get your mortgage loan in Kansas City.
Contact the Kansas City Mortgage Guy today to learn more about refinancing your home loan!
AUTHOR BIO
Will Foster | First State Bank Mortgage Senior Loan Officer
I became a mortgage lender in 2010, right after the "bubble" popped, and the mortgage industry underwent an incredible transformation. This has given me a unique advantage in the fact that I have never known anything other than the highly-regulated world we now live in.
Throughout my years of experience, my primary goal has been to keep up with the constant changes in the industry so I can help my clients investigate all of their options and maximize savings. In addition, because I specialize in Conventional, FHA, USDA, Jumbo, portfolio, and VA refinances and purchases, I can help a wider variety of individuals, families, and investors identify and secure the right loan to best suit their future interests.
The mortgage process can be a little confusing and even overwhelming these days with all of the regulations. I guide my clients through the process from start to finish, and I try and make it as painless and hassle-free as possible.