Selling an existing property to purchase a new one isn’t as simple as most homeowners assume. Depending on your financial situation, you might’ve already considered refinancing but remain on the fence. Along with the ever-changing mortgage market, however, a refinance on your home might make the most sense.

What is a Refinance?

To refinance your mortgage is to replace your existing loan with a new one. The new mortgage will then relieve the remaining balance on your previous one and readjust your terms. Often, you won’t turn to your current lender for a refinance.

If you’re looking to resolve any of the below circumstances, considering a refinance may work in your favor.

1. You Need to Consolidate High-Interest Debt. A mortgage refinance won’t always indicate issues with the property itself. Sometimes, the inability to satisfy credit card, personal loan, or payday loan debts make refinancing an appropriate solution. Through a refinance, you can combine the high-interest debt into your mortgage and repay them at a lower rate. However, if you’re only dealing with small amounts of lower-interest debt and prefer to use credit cards regularly, a refinance may not be for you.
   
2. You Want to Renovate Your Home. If you’ve outgrown your current space but can’t afford to purchase a new home, a refinance can instead support a much-needed renovation. Upgrade an outdated bathroom or kitchen by tapping into your home equity. If you’ve owned your property for several years and the market is trending upward, there is a good chance it might already be worth more than your mortgage anyway. In the long run, a renovation can further increase your home’s value, should you decide to sell it later.
   
3. You Want to Get Rid of Your PMI. If private mortgage insurance (PMI) is overwhelming your finances, a refinance can transition you into a loan without it. However, the ability to do so will depend on your loan-to-value ratio, which should be 80% or lower. Keep in mind that you’re less likely to eliminate your PMI if you’ve only inhabited your current home for a short period.
   
4. You Want to Lower Your Interest Rate. If interest rates are dropping, you can align with current numbers by applying for a rate and term refinance. With it, you can pay off your previous mortgage without having to secure a new loan or pull any equity from your property. Apply for this type of refinancing if you’ve been inhabiting your home for over a year.

Mortgage Refinancing with Steelman Mortgages

Lots can change over the lifetime of your mortgage. At some point, refinancing may seem like the only viable next step. Always consider your reasons for refinancing before you pursue an application with a new lender.

If you’re looking to adjust your mortgage terms, make lower monthly payments, consolidate debts, or undergo a home renovation, seek assistance from Steelman Mortgages. The best mortgage company in Roseville, we can provide you with a free home refinance analysis to determine what type of loan product best suits your needs. Contact us today at (916) 847-7263!