Considering a refinance or new mortgage? Read this first
With all the research, phone calls, approvals and paperwork that go into buying or refinancing a home, it’s easy to become overwhelmed by the process. But owning a home can be worth the effort – as a smart financial investment and as a place to create family memories.
If you already own a home and have built equity in it but are tired of the latest interest rates being lower than the one on your current loan, Nationwide Bank has good news for you. With our mortgages it’s possible to take advantage of lower interest rates and effectively reduce your monthly payments through mortgage refinancing.
At Nationwide Bank®, we want to help you make smart choices on your mortgage financing options so you can enjoy increased financial flexibility and comfortably budget all of life's expenses. When refinancing with Nationwide Bank, you can use the equity that you’ve accrued to fund home improvements, consolidate debt or pay for your child’s education.
If you’re considering getting a new mortgage or want to refinance your current property, make the process easier with these tips.
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Understand all the fees and terms associated with refinancing.
Before you call a mortgage lender ask yourself these questions:
- How long do I plan to stay in my home? Will it be long enough to recoup the refinance costs? If you plan to stay in your home for more than a few years, then refinancing a mortgage may be a good choice for you.
- What refinancing fees can I afford? Be prepared to pay between 3-6% of the outstanding principal in refinancing fees. Some examples of the fees you can expect to pay are the application, loan origination, appraisal, inspection and closing fees. It’s worth asking lenders about these fees because sometimes they will waive a few of them and you can save money.
- How long will your home refinancing extend the term of your loan? Various terms, such as 15, 20 and 30-year loans are available when you refinance your mortgage. You can potentially shorten your mortgage term or replace one mortgage type with another.
- What monthly payment can you afford? Review your finances to determine what you can afford to pay monthly.
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Decide if you’re ready to own. Maybe you’re tired of giving
money to a landlord every month, or perhaps your family has outgrown
your current space. Before you call a real estate agent ask yourself
these questions:
- Will I be able to stay in the house for several years to make it worth the time and investment? You may want to plan to stay in your home for several years so you break even on your mortgage.
- Do I have a stable income to pay the mortgage each month? Determine if you are in a position to pay a monthly mortgage.
- Do I have the money to run a house? While you don’t have to fill every room with furniture when you first move in, you may find yourself buying ladders, a washer and dryer and garden tools. Make sure you set aside some money for this as well as a fund for any unexpected home repairs.
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Consider your down payment. If you’re wondering how much home
you can afford, our mortgage calculators can help. Once you have
your price range in mind, it’s a good rule of thumb to save 20% of that
amount to use as your down payment. It is possible to put down less
than 20% as a down payment but some lenders may require you to purchase
private mortgage insurance.
- Know your credit score. Your credit score helps determine what interest rate you’ll be paying on your mortgage or refinance. The better your score, the better the interest rate you may be eligible for – and the more money you may be able to save. Before you apply for a mortgage, get a free credit report from Equifax, TransUnion and Experian, check for errors and work toward improving your score.
- Compare types of loans. There are many types of mortgage loans available, including fixed-rate, adjustable-rate and jumbo. Use this chart to determine the one that’s right for you, whether you’re getting your first mortgage or looking to refinance.
Get more information with Nationwide Bank and learn how to receive the right financing for your new or existing home so you can pay less on what you borrow, while securing attractive loan rates and flexible features.
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