Should I Refinance My Mortgage Now? Tips to Help You Decide.

Mortgage rates are still around record lows.  Will they stay this way much longer?  No one knows, but we do know this environment should motivate you to at least investigate the thought of refinancing.  We have a few helpful questions you can ask yourself to determine whether a refinance is right for you and your situation.

What is your current mortgage situation?

Beyond your current interest rate, consider your principal balance, payment amount and the time left on your loan. If your principal balance is low, you may not benefit from a lower interest rate because most of your monthly payment is going to paying down the principal, not toward interest.

Read your mortgage statement, which breaks down how your payment is distributed each month. You pay your greatest interest in the early years on a mortgage because your principal is largest. Each monthly payment is partially interest and partially principal. 

You should also look at whether you have Private Mortgage Insurance (PMI).  PMI is typically required if the Loan to Value of your home is more than 80%.  A new appraisal on your home may help you eliminate your PMI payment.

Along with the items above, if your interest rate is significantly higher than what you would get through refinancing — say 4% or 5 % — then a lower rate through refinancing may save you money. 

Click here to access our simple and free mortgage refinance calculator.

How long do you plan to stay in your home?

If you are planning to move in the next year or two, the savings you’d receive by refinancing may be minimal. You may not live in your home long enough to cover the costs of getting the new loan. Instead, focus on getting in the best shape financially through paying bills on time, keeping other debt low and saving for the transition.

If you plan on staying put for years to come, a mortgage refinance may benefit you greatly with cost saving on interest or lowering monthly payments.  You may also want to update or expand your house without depleting your savings account.  A refinance may be your perfect option to give you the updates you are seeking while keeping your nest egg intact.

Do you have the time and credit history to refinance?

With some banks, refinancing can be time-consuming. American Bank & Trust has the team to help minimize the time and effort you put into the refinance.  Our process has been proven to be extremely efficient with our mortgage loan experts and the whole mortgage team to support you through an amazing experience. 

Your credit score will also need to qualify for a refinance. If you are unsure where you stand or have questions about your credit history, your American Bank & Trust Mortgage Officer can walk you through your options and talk about next steps.

Ready to Refinance? 

After reading these questions and evaluating your situation, does refinancing your mortgage make sense?  If the answer is yes, maybe, or even no, it costs you nothing but time to check with your American Bank & Trust Mortgage Loan Officer to find out that answer. And that little bit of time could end up saving you a significant amount of money. 

Click here to apply or reach out to any of our Mortgage Loan Officers in Huron, Pierre, Sioux Falls or Watertown to learn more.

We can also assist you with a new home purchase, investment property, or construction loan.  Move quick – we don’t know how long these historically low rates will last!

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