When Can I Refinance My Home?

Home refinancing is a great way to take money out of your home and put it in your pocket.  If you're looking to remodel your home, add on to it, or start any big project, refinancing your home is an option.  Many people can refinance their home, but the more equity you have in the home, the better. Refinancing you home can also have other benefits, like lowering your monthly mortgage payments.  Refinancing can be a great asset to homeowners, allowing them to tap into the built up equity in their homes and gaining a lower interest rate and lowering the mortgage payments, but not everyone can or should refinance their home.

So, who can refinance their home?  Is it some exclusive club?  No, but there are limitations on which homeowners can do it.  First, you have to choose a lender to approach about refinancing your home.  This can be a taxing process in itself.  You need to do your homework before you choose a lender.  You'll need to find out what their requirements are what interest rate the refinanced loan would be set at, if insurance will be required on the refinanced loan and several other questions.  Not every lender will approve refinancing, either.  You have to meet their criteria.  The lender will do several checks, including credit and background checks to determine if you are eligible to get a loan through their company.

If you have no equity in your home, refinancing is not that good of an option.  You may end up with a higher payment than if you'd stayed with the original lender.  If your home is worth less than what you owe, you probably will not be able to refinance or sell the home without having to pay a chunk out of your own pocket.  The best thing to do in this case is simply to pay down the loan until you have equity built up in the home, then refinance or sell.

Mike Bartlett, of Boston, Massachusetts, was in a quandary over refinancing.  He wanted to refinance and knew he had the equity to do so, but the national lenders kept giving him the run around; offering high interest rates that would not have benefitted him in the slightest.  In disgust, he began looking locally and found a lender in his hometown.

Refinancing your home can be a great thing, but you have to be careful when doing it.  You may be stuck with a worse loan than you currently have.  Careful research is needed to avoid frauds and cons as well; these abound in the real estate industry.

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