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When to opt to refinance in Rocklin CA

f you are facing problems in paying out the mortgage loan that you have taken out, then you can certainly opt for mortgage refinancing. The most important advantage of mortgage refinancing is that it replaces the original mortgage loan with a new mortgage which is more affordable to you. The new mortgage loan that is being taken out is secured on the same property as that of the original mortgage loan. There could be a variety of compelling reasons for opting for mortgage refinancing. First of all, mortgage refinancing offers you the chance to save more. Generally, the monthly mortgage payment amount is lowered and it becomes easy to pay off the mortgage loan. The lower monthly mortgage payment amount offers you the chance to save more. Again, refinancing gives you the chance to shorten the length of your mortgage loan by reducing the term of the loan. However, in this case, you actually pay more than the original monthly mortgage amount and become free of debts much earlier. Again, the original mortgage loan may be an adjustable rate mortgage (ARM). If the market rate of interest goes up, the rate on the original mortgage may also go up. In such situation, you may want to switch to the safety of a fixed rate mortgage (FRM). The rate on a FRM is fixed. Anyways, here we discuss about some specific cases when you can opt for refinancing.

Build up equity

If you have built up sufficient equity in your home, then you can opt for refinancing. If your equity in your home is more than 10%, then you can opt for mortgage refinancing.

Check whether the refinance interest rate is low

As a thumb rule, if the rate of interest on mortgage refinance is at least 2% lower than the rate of interest on original mortgage loan, it makes sense to opt for mortgage refinancing.

Anyways, if you do not make any late payment is the past one year, then you have a fair chance to get a mortgage refinance loan. But before opting for a mortgage refinance, make sure that you have the right reason and requirements

Lower your FHA mortgage insurance rate in Rocklin CA

Homeowners can now lower their interest rate on their FHA mortgage insurance without getting a new appraisal. That means you do not have to worry about not having enough equity like a normal conventional refinance. The other great news is that if your FHA loan was originated prior to June 2009, you will not have to take out the higher mortgage insurance. The government has raised the monthly FHA mortgage insurance premium a couple of times since 2009. Many Rocklin homeowners did not refinance last year because even though their interest rate could be lowered the monthly mortgage insurance premium was going to cost more so it did not make sense to reifnance. You can keep the same monthly insurance premium now if your loan was originated prior to june 2009.