Helena Talbot's blog - What You Should Know Before You Consider Refinancing

If you have a high interest rate, you may have considered refinancing .  However, you should do some research to learn all you can about refinancing before you proceed.

Here are a few things you should know before you consider refinancing.

1.  Often times the cost of refinancing can offset the savings you were expecting to get .  The average fees range from $1900 to $3650 and this doesn't include the loan origination fees, PMI or discount points.

2.  In some states, if you refinance your home, your new loan is then considered a "recourse product."  That means if you default on your loan and the sale of your home doesn't completely cover what you owe, the bank can seize your other assets.

3.  Your current loan may include a prepayment penalty.  So you will need to consider the prepayment penalty fees you will incur to determine if refinancing your loan is really worth it.

4.  If you refinance your mortgage, you will need to make sure you are able to stay in your current home for at least two to five years to recoup the cost of the refinance; otherwise, you could lose money.

5.  If you have recently refinanced your mortgage and you are considering refinancing your loan again, you will not see much if any savings at all.  It's not a good idea to refinance unless you can drop your interest rate by at least a point and a half - two points or more is preferable.

6.  Qualifying  for a loan is even more difficult than ever due to the recent housing market debacle.  Therefore, you will need a credit score of at least 720 to get a reasonable interest rate.  Anything less than that will earn you a higher interest rate and it's possible you may not even qualify at all.  Not to mention the mounds of paperwork you will have to wade through and a long drawn out couple of months to get through the approval process.

Before you consider refinancing, you should talk to your realtor.  In the state of the current housing market, your realtor may be able to find you a more suitable home for less money than it would cost you to refinance your existing home.  

Additionally, if you have equity in your home, you could use that as a down payment on your new home, which will better your chances of getting your new mortgage approved.  

I specialize in helping buyers and sellers invest in real estate in Loudoun County and Northern Virginia.

I have over 25 years experience in the real estate industry.  As a Broker/Owner with Exit Realty Talbot and Company, I bring special tools and solutions that enable me to exceed the expectations of my clientele.  If you are considering listing your property in Loudoun County or the nearby areas, ask me about our latest internet marketing systems.  I would appreciate the opportunity to earn your business.  I am experienced in listing and selling short sales.  For information on the short sale process, please visit  www.LoudounShortSaleSolutions.com.

For a free market analysis on the value of your home, please visit http://www.LoudounHomeValues.com

My past awards and designations include – 2003 President of the Dulles Association of Realtors, 2003 Dulles Area Assoc Realtor of the Year, Salesperson of the year 2000 Dulles Area Assoc of Realtors,  Top Producer awards from both the Dulles Area Association and the Northern Virginia Association of Realtors.  I am a member of the Top 5 in Real Estate Network.

I have lived in Loudoun County since 1979.  I am married with two grown children and two grandchildren.  My son in law is my business partner in real estate.  I love to jog in the mornings and spend time relaxing on my Trawler during the summer months.

Loudoun County and Northern Virginia Real Estate Sales and Solutions – Helena Talbot, Broker. I specialize in helping buyers and sellers invest in real estate in the Northern Virginia area to include Loudoun County and surrounding areas including Fairfax, Clarke, Fauquier, Prince William  Counties.  Our local neighborhoods includeLeesburg, Ashburn, Sterling, Potomac Falls, Brambleton, Broadlands, Lansdowne, River Creek, Belmont Country Club, Beacon Hill, Shenstone, Waterford, Lovettsville, Purcellville, Hamilton, Round Hill and Bluemont.                        Cell 703.727.9885    Office 703.574.3800

Free iPhone/Android Mobile App to search Northern Virginia real estate.  2 easy ways to get the App:  Text “Exit9” to 87778 or enter http://87778.mobi/Exit9 into your browser.