Your previous mortgage may no longer suit your needs, or could be costing you too much. Don’t pay more than you need to in excess interest. Refinance with us and start saving today!
- Great Rates & Local Service
- Low Closing Costs
- No Application Fees
Saving more on your mortgage doesn’t need to be difficult. Backed by historically low rates and community-based member service, refinancing your home mortgage with TEG FCU has never been easier. Apply online to get started right away, or speak to one of our mortgage officers for assistance.
Paying off your current mortgage and getting a new loan to replace it, can be a smart financial move if it reduces your payments, it shortens your term, or helps you build equity faster. Mortgage refinancing can be worth it, if you plan to be in your home long enough to benefit from the savings that a lower interest rate and payment could bring.
Three Good Reasons To Refinance Your Mortgage:
1. To take advantage of lower interest rates
Refinancing a home loan with a lower mortgage rate can help you reduce your monthly payments and pay less interest over the life of the loan. The traditional rule of thumb says to refinance if your rate at least 2% below your current rate. You also might be able to qualify for a better rate if your credit score has improved. Generally speaking, the better your credit is, the lower the interest rate you’ll receive.
With flexible term lengths up to 30 years and low interest rates, shaving off the excess in your home mortgage is more than possible. See how much you could be saving with some help from the folks at TEG FCU.
2. To shorten the life of your loan
If you have a 30-year loan, you may want to refinance to a 15-year loan to save money on interest. Refinancing for a shorter loan period could decrease the amount of interest you’ll pay over the life of your mortgage and significantly speed up the repayment process. That way, you can start paying off the principal sooner, instead of dedicating monthly checks to interest rates.
3. To convert to a fixed-rate mortgage
If you have an adjustable rate mortgage (ARM), you may want to lock in a fixed rate so that your rate will remain unchanged for the entire length of your loan. Switching to a fixed-rate mortgage can be a good option if interest rates are expected to rise or if you’re looking to simplify your budget knowing your payment will be the same each month.
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Mortgage Refinance FAQ
Q: How soon can I refinance my mortgage?
A: You can refinance immediately after purchase. However, that may not be the best choice for your budget and lifestyle. Consider how long you plan on staying in the home, as well as how long it will take to break even on the closing costs as you decide if refinancing is right for you.
Q: Why should I not refinance my mortgage?
A: If your mortgage refinance would cost you more than what you already owe, or not reduce your interest rate significantly enough, it might not be the best financial move at the moment. Speak with one of our mortgage loan officers for assistance in deciding when is the best time to refinance.
Q: What’s the best way to prepare for a home mortgage refinance?
A: Prepare yourself for refinancing by gathering important mortgage documents, saving extra money each month to cover closing costs and additional fees, and shopping around for the best interest rates. Credit unions, like TEG FCU, offer competitively low-interest rates on home loans and refinancing.
Q: How much will it cost?
A: Since a refinance is essentially getting a new mortgage to replace your current one, with a whole new set of closing costs, a typical refinance will cost about three to five percent of the loan’s principal.
Before proceeding with your refinance, you should work out how long it’ll take you to make up the closing costs you’ll have to pay for your refinanced mortgage. At a certain point, refinancing will pay for itself. That is the break-even point. To find your break-even point, divide the mortgage closing costs by the monthly savings from the new terms. For instance, if you pay $3,500 in closing costs and save $200 per month through refinancing, you will break even after 17.5 months. If you don’t plan on staying in your home for that long, or you can’t afford to wait until then to recoup your losses, refinancing may not make sense for you.
Have additional questions? See our full list of Mortgage FAQs here.