refinance facts altitude home loans

7 Mortgage Refinance Facts and Myths to Set the Record Straight

Refinancing for the first time might make you uncertain of what to expect. At Altitude Home Loans, we strive to provide you with innovative mortgage refinancing options. Let’s explore the common refinance facts and myths so that you can approach home refinancing in Tucson with confidence.

Myth#1: You Will Not Save Enough Money

Depending on the interest rate on your current loan and the rates today, you can save money by refinancing. Even a half-point reduction in your interest rate could save you a significant amount of money over the life of the loan. 

Myth#2: You Need Perfect Credit to Refinance

Refinancing options for homeowners with bad FICO scores do exist. Most lenders know that late payments or other bumps in the road may show up on your credit report. Ask an expert financial advisor how to improve your credit score. 

Myth#3: You Need Expert Knowledge About Refinancing 

Many people assume that they need to understand the mortgage process for refinancing. Before you meet with a lender, you may find it helpful to brush up on your knowledge. No matter how little you know, do not let this stop you from lowering your mortgage. 

Contact a financial advisor for assistance and find the break-even point for your loan amount. Keep reading the refinance facts to learn about the most common misconceptions. 

Myth#4: You Lose Equity by Refinancing

Refinance loans can help you build equity since you pay off your mortgage faster. Some refinance loans offer the option of drawing on your home equity like a cash-out refinance. Getting a lower interest rate or shortening your mortgage term will not affect your equity.

Myth#5: You Can No Longer Sell Your Home

Refinance loans replace an existing mortgage and do not prevent the sale of your home. Unlike home equity loans, a refinance does not place a lien on your home. If you sell your home, you must repay the loan or make the repayment from the sale.

Myth#6: You Should Only Refinance for Lower Interest Rates

Many homeowners believe refinancing makes sense if interest rates dip below their mortgage rate. However, borrowers can save money by refinancing a 30-year loan to a 15-year loan. While this could result in higher monthly payments, it will save you tens of thousands of dollars in interest.

Myth#7: You Cannot Negotiate Closing Costs

Refinancing does require you to pay closing costs. Normally, you cannot negotiate loan origination and application fees imposed by mortgage lenders. However, you can negotiate the recording fees set by the state or local government.

Altitude Home Loans: Trusted Mortgage Refinancing Company

When you refinance, you get a new mortgage to pay off your current one. A trusted financial advisor can debunk the most common myths and provide you with up-to-date refinance facts. Altitude Home Loans can help you navigate refinancing, talk about your finances and mortgage loan truths, and save money. 

Contact Altitude Home Loans today to discuss refinancing your home. Call us at (520) 500-1010.

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