This page uses JavaScript. Your browser either does not support JavaScript or you have it turned off. To see this page properly please use a JavaScript enabled browser.
Acknowledge

Matadors Community Credit Union may collect the following information from users of our website. To see how this information is used, click here to go to our privacy page. Information we may collect: IP address, browsing history, search history, products and services considered, geolocation data, and information about your interaction with our website, application or advertisement. If you complete an online form, we may also collect your name, e-mail address, physical address or phone number that you provide to us.

PHONE SCAM WARNING! PLEASE READ:

Over the past few days, we have received reports of fraudulent activity affecting MCCU members.  

The scam involves a phone call from a scammer spoofing a MCCU phone number (it will look like it is coming from MCCU). The scammer states they are calling to confirm debit card transactions on the member's account (they have been referencing Walmart, but it could be any merchant).  The scammer then proceeds to try to obtain online banking login credentials, PINs, and SSN information.  This activity is fraudulent!

Do not ever give out your Debit Card number, PINs or passwords!  MCCU or our Fraud Monitoring vendor may call to validate a transaction, but will never ask you to provide us your PINs, passwords or other sensitive account information as a form of verification.

If you receive a phone call such as this, please report it to us immediately at 818-993-6328!

 Matadors Community CU Go to main content
Lock ONLINE BANKING LOGIN
Lock ONLINE BANKING LOGIN
Should I Refinance My Home Mortgage?
Should I Refinance My Home Mortgage?5/22/2018

Q: I’d love to lower my monthly mortgage payment. Should I refinance my home loan?

man sitting at table with young couple, looking down and discussing paperwork on tableA: There are lots of factors to consider before deciding to refinance.

Why people refinance

Here are some of the better reasons many homeowners decide to refinance:
  1. To take advantage of lower interest rates

 

Many lenders claim that even a 1% savings on interest rates should be reason enough to refinance. Reducing your interest rate can help you build more equity in your home sooner and decrease the size of your monthly payment, saving you lots of money.

  1. To shorten the life of their loan

If you have a mortgage with a really high interest rate, refinancing can help you pay off your loan in half the time without changing your monthly payment much.

  1. To convert between adjustable-rate and fixed-rate mortgages

Over time, adjustments can increase the rates on Adjustable Rate Mortgages (ARMs) until they top the going rate for fixed-rate mortgages. When this happens, switching to a fixed-rate mortgage is a good idea.

When refinancing is a bad idea           

  • Most people who refinance for this reason end up spending all the money they save, and then some.

           

  • If you’ve only got 10 years left on your mortgage and you want to refinance to stretch out those payments over 30 years, you won’t come out ahead. Any money you save on lower payments will be lost in the cost of the refinance and the extra 20 years of interest you’ll be paying on your mortgage.

           

  • The money you save each month might not even come close to the prohibitive price you paid for your refinance.

What is a cash-out refinance?

Some homeowners refinance to tap into their home’s equity. To do this, they’ll need to refinance with a bigger loan and stay within the loan-to-value threshold of their loan program.

Only choose this option if you can afford the loan terms, and preferably, will use that money to increase your equity.

How much will it cost?

Refinances aren’t cheap. You’ll need to pay broker fees, closing costs and more. A typical refinance will cost anywhere between 3-6% of the loan’s principal.

Here’s how to determine if a refinance will save you money: Procure a good faith estimate from several lenders to get your projected interest rate and loan price. Divide this price by the amount you’ll save each month with your new rate. This is the number of months it will take for you to break even on the new loan.

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 be a good idea.

Your Turn: Have you refinanced? What drove your decision? Let us know in the comments!



« Return to "Matadors Money Matters Blog"
Share: Share on Facebook: Should I Refinance My Home Mortgage? Share on Twitter: Should I Refinance My Home Mortgage?
Comments
No comments have been posted yet.
Post Comment

(Only last initial will display on comment)

(Not displayed on Comment)




Security Code:
What's this?
Go to main navigation