Due to the current pandemic, experts believe that the real estate market is going to suffer in the long run. As more and more people get unemployed, the market will see homeowners fall behind on their mortgage payments. So, to make sure the situation doesn’t go from bad to worse, the Federal Reserve Cut interest rates. And Long Island City refinance rates took a similar turn.
Therefore, contrary to the economic situation, it is an excellent time to refinance home mortgage, especially for people in Long Island.
Why Refinance Your Home Mortgage Right Now?
Mortgage interest rates are at an all-time low right now. This means that if you refinance your home mortgage right now, you can save quite a lot of money in interest payments. Additionally, by refinancing, you can also:
- Prepay your mortgage. Refinancing can net you a lower interest rate, which can save you money on lower monthly payments. By combining these savings with the mortgage payment, you can pay more every month than you are due. This way, you can slowly chip away at the principal amount, ending your loan payment earlier.
- Change the terms from an Adjustable-Rate Mortgage (ARM) to a Fixed-Rate Mortgage. In an ARM, your monthly mortgage payments can increase or decrease depending on the interest rate changes. This can be troublesome for some people as they don’t know how much they will pay the next month. By opting in for a fixed-rate mortgage, you know exactly how much you are going to pay.
- Receive cash from Home Equity. When you refinance your home mortgage, the payable amount may be higher than the remainder of your loan. You can receive this difference in the form of a cash payment. This is called Home Equity. Home equity can be quite helpful, especially for things like home renovations.
How Long Until You Can Refinance Your Mortgage?
The time you need to wait before you can refinance your mortgage varies from lender to lender. For instance, most leading mortgage firms that offer home refinancing in Long Island can agree to refinance your mortgage after 120-180 days.
The actual refinancing process, on the other hand, only takes 20-45 days.
That said, experts do not advise to refinance shortly after you get a mortgage. Wait a good while so that you can have a better idea of your financial situation.
What Should I Watch Out For When Refinancing?
Before applying for home refinancing in Long Island, consider the following things:
- Ensure you have a good credit score.
- Make sure your Debt-to-Income ratio is below 36%.
- Know what refinancing will cost; This is usually 2 to 6% of the total loan amount.
- Keep an eye on your tax deductions. Lower interest rates, when refinancing, can lower your tax deductions.
Refinancing a home should not be hard, especially if you choose a top of the line Long Island NY mortgage broker like us. Therefore, if you are looking to refinance your mortgage in Long Island, contact Lynx Mortgage Bank to learn more about our products and programs 877-599-LYNX.