The Sean Z Team will help you decide if refinancing your home now is the best financial path for you.

Wondering if you should refinance your home in St. Louis? Mortgage rates are near historic lows, so many people choose to refinance their homes with a new lender to get the most out of their money. But is it a good idea for you to do so? When is the right time to refinance?

When Mortgage Rates Fall At Least 1% Below Your Current Rate

As a rule of thumb, most lenders suggest that you refinance when mortgage rates are at least 1% below your current rate. The lower, the better – if you can refinance to a rate that’s 2% or more below your current rate, you’ll save even more money.

It’s important to remember, though, that you will usually spend about 2 to 5% of the amount of the loan in closing costs. You’ll need to determine your “break-even point” to make sure refinancing is worth it.

For example, if you spend $3,000 on closing costs and your monthly payment drops by $150, this means you’ll “break-even” after 15 months – and start saving money. But if you move or sell your home before this time is up, you’ll lose money when refinancing, so you should usually only refinance if you plan on staying in your home in St. Louis for a while.

When You Have Enough Equity To Remove PMI

PMI is required when you don’t have enough money for a down payment of at least 20% of your home’s value. It can cost between 0.25% and 2% of your loan balance per year – which is quite significant.

But if you have at least 20% equity in your home, you can refinance your loan to remove PMI and save on this monthly cost. If you can also get a lower interest rate, you’ll save even more!

When Your Credit Score Has Improved Significantly

If you have had struggles with bad credit in the past, but your credit score has improved quite a bit in the past few years, it may be a good idea to try to refinance. You may be able to save a lot of money on interest since you’ll qualify for prime rates if you have a credit score over 700.

To Convert To A Fixed-Rate or Adjustable-Rate Mortgage

Both fixed-rate and adjustable-rate mortgages have their own pros and cons. If you currently have an adjustable-rate mortgage (ARM) or a fixed-rate mortgage and want to convert to a different type of loan, refinancing is a good option.

Contact The Sean Zalmanoff Mortgage Team To Learn More

If you think you could benefit from refinancing your home in St. Louis, Sean Zalmanoff: USA Mortgage is here to help. Contact us online or give us a call at (314) 361-9979 to get the assistance you need and find out if refinancing makes sense for you and your family!