We hear a lot about refinancing home loans today, but is it a good idea? In the most basic of terms, refinancing a mortgage means paying off your existing home loan and then replacing it with a new one. There are lots of reasons why people decide to refinance a home loan. One might be to get a lower payment or a lower interest rate to help them save over the life of the loan. Another might be to shorten the term of their mortgage, dropping from a 30-year loan down to a more manageable 15-year opportunity. Others might want to refinance to switch from an adjustable-rate mortgage (ARM) loan to something with a fixed-rate. If your credit rate has improved since you purchased your home, you might be eligible for a better deal. The first place to start is by considering a credit union home loan at St Anne Credit Union in New Bedford.
What to Expect
When you refinance a home loan, it is the same process as you went through when you purchased your home initially. An appraisal is required to determine the current value of the property, a title search, application fees, and other costs may make it prohibitive. However, if you stand to save a significant amount by refinancing and switching to a credit union home loan, it will be worth all of the paperwork and trouble. Just imagine how much more you’ll have leftover in your New Bedford credit checking account at the end of the month if you can reduce the amount of your monthly mortgage payment.
If you need to gain access to cash to make home improvements, make sure to speak with your local agent about a home equity line of credit. Instead of choosing to refinance a home loan, this could be a way for you to maximize your ability to remodel your kitchen or bathroom, put on an addition, put in a pool, or make other improvements that add value to the home. St Anne Credit Union in New Bedford does have opportunities for a home equity line of credit, which can be up to 75 percent of the value of your home, less your first mortgage. Visit our website or speak with an agent for details.
Fixed-Rate Versus Adjustable-Rate Mortgages
There’s a big reason why so many homeowners are trying to get out from under adjustable-rate mortgages. At first, they might have seemed like a great idea. You get to lower your monthly payment when the rate drops, but then pay a higher amount when the market shifts. For many first time homeowners, the giant increase when the market shifted in recent years meant payments so high they were unable to meet them successfully. A lot of people lost their homes as a result. The best way to get out from under an adjustable-rate mortgage is to refinance a home loan with your local credit union in New Bedford.
At St Anne Credit Union we offer fixed rate mortgages between five and 30 years. Our agents can provide you with details about our mortgages and the current market rates. The terms and conditions of all the loans available are subject to change without notice. Our website is a great tool to give you an idea of what to expect, but for true figures, terms and conditions, your best bet is to call our office in New Bedford and speak with an agent. We also have auto loans for new and used autos, personal loans, and Share loans, in addition to our credit union home loan opportunities and home equity line of credit.
The Rule of Thumb
When it comes to deciding to refinance a home loan, only you can determine what is best. However, the industry rule of thumb was that a refinance would be “worth it” if you could reduce the current interest rate by at least two percent. However, many lenders are now seeing homeowners refinance if they can save at least one percent, especially if they are switching from an ARM to a fixed-rate mortgage. If you want to get started on applying for a credit union home loan with St Anne Credit Union in New Bedford, just stop by our office. We can begin the process of New Bedford credit checking and verification to see what you would qualify for through our institution.
As a member of a credit union in New Bedford, you might be eligible for some discounts, reduced fees, and better interest rates compared to banks and other traditional financial institutions. Give us a call at 508-993-0011 to speak with an agent about any questions that you might have about a credit union home loan or to make an appointment to start working on your formal application.