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You are here: Home / Blog / 7 Things To Consider Before Refinancing Your Mortgage

7 Things To Consider Before Refinancing Your Mortgage

October 6, 2020 by Sean Zalmanoff

The decision shouldn’t necessarily be based on what the rates are, but more on your personal financial situation.

Many Missouri homeowners may consider refinancing their mortgage when they look at the market and see low-interest rates. However, this decision shouldn’t necessarily be based on what the rates are, but more on your personal financial situation.

Interest rates can be quite convenient today but completely change in a short time! This is why such decisions must be weighed more in-depth. Here are 7 things to consider before you refinance your mortgage:


  1. The Cost of Refinancing – Refinancing a home costs money – usually around 3% of even 6% of the total loan amount. These costs can be reduced or even added to the actual loan, but you should still consider these costs before refinancing your mortgage.
  2. Your Debt-to-Income Ratio – Lenders have stringent requirements when it comes to debt-to-income ratios. They will not offer a loan unless they are sure you have the necessary income funds to cover the payments, and a lot of them prefer to keep these payments at around 30% of your monthly income.
  3. Your Home Equity – Refinancing with little or no equity is not always possible with traditional lenders such as banks. Hence, you need to check your home equity and find a suitable program. There are some government funds available for this purpose, but you’ll need to see if you meet their requirements.
  4. Your Credit Score – Just like the debt-to-income ratio, lenders are strict about homeowner’s credit scores. Banks usually want to see a 760 or higher credit score to approve loans for their lowest mortgage rates.
  5. The Difference Between Rates and Term – As a borrower, you may focus your search on the interest rates, but the term is also significant. For instance, if you want to pay as little as possible monthly, you need to look for a loan with the lowest rate over the longest term.
  6. Refinancing Points – Additionally, you also need to consider the points on top of the interest rates. Points are often paid to bring down the rates and are paid at the closing or added to the new loan, so be sure to calculate how much these points total up to!
  7. Your Taxes – Your mortgage interest deduction reduces your federal income tax bill, but your tax deduction may be lower if you refinance and pay less in interest. While not everyone sees this as a reason to postpone their refinancing plans, it’s still something to consider.

SeanzTeam Can Help!

If you’re looking for options to refinance your St. Louis mortgage, have a team of professionals help you weigh your options and make a better, informed decision! Reach out to SeanzTeam now to find out more about how we can assist you to make the right financial choice when it comes to mortgage refinancing.

Call The Sean Z Team Today!

Home of the TBD $5K Guarantee Approval

(314) 361-9979

Filed Under: Blog Tagged With: refinance, Refinancing

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Sean Zalmanoff: Better Rate Mortgage

1118 Hampton Ave
St. Louis, MO 63139
(314) 361-9979

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