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Home Advice You Can Count On.

We make it easy to do everyday banking at Horizon, but everybody still needs some sensible advice from time to time to help with their goals and strategies for saving, investing wisely and making the most out of your financial journey. That’s why we provide fresh advice topics to help you along the way.

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7 Questions to Ask Before Refinancing

Couple on back porch

For many homeowners, refinancing can be a smart move. However, before you decide to refinance your mortgage, ask yourself the following:

1. What are my goals for refinancing? Are you trying to lower your total monthly payment? Pay off your mortgage sooner? Get access to accumulated equity? Your goals will help you determine what terms and interest rate to look for.

2. What's the value of my home? You can find out approximately what your home is worth by checking out the sale prices of comparable homes in your neighborhood.

3. What is my equity? Check your latest mortgage loan statement to find your outstanding balance. Subtract the outstanding balance from your home's current value. For example, if you owe $250,000 on a home worth $300,000, you have $50,000 in equity. (You may have a harder time refinancing if, due to economic pressures, your home is worth less than the amount you owe.)

4. Do I have other liens against my home? If you have a home equity loan or line of credit, the outstanding balance will be deducted from your equity.

5. How long do I plan to stay in my home? If you expect to stay in your home for at least several more years, refinancing may make sense. If you plan to move soon, you may not have time to recoup the costs involved in refinancing the mortgage.

6. What are the current interest rates? Generally speaking, you may want to consider refinancing if you can get an interest rate at least 2% below your original loan rate. However, you may also want to refinance if you have an adjustable-rate loan, are concerned about future rate increases and want to switch to a fixed-rate loan – even if the new rate is the same or slightly higher. You can estimate your monthly payments and interest charges using the mortgage calculators at www.horizonbank.com.

7. What fees are involved in refinancing? Find out about closing fees, appraisal fees, etc.

Contact a mortgage loan officer at Horizon Bank who can help you review your options and determine whether refinancing makes sense for you or call 888-873-2640 for a branch near you.

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