If you own a home in the Indianapolis real estate market that has a mortgage over 15 years old, you may still want to consider refinance. The stopping block to most home mortgage refinancing at this time is the decline of property values, and the fact that many homeowners cannot reaffirm a mortgage for the existing balance, because it is subsequently determined that the home is not worth what is owed on it. If you have an older mortgage, chances are you have already paid down enough of the equity in your home to successfully execute a refinance .
So, who should be considering refinance? Since there is no cost involved to see what the numbers would look like, everyone should give it a shot. Contact your local Indianapolis real estate lender, in fact, call several. Let them know that you are interested in refinancing and let them see what they can come up with. Since the lending agents are hurting just as much as the rest of us, they will likely jump at the chance for the business, especially if you are a long time homeowner with good credit. This will also put them in competition with each other, guaranteeing that you will get the lowest interest rate possible.
When you begin contacting several Indianapolis real estate lenders to inquire about refinance, there will be several questions they will all ask you, and you will be best served if you have this information on hand when you make the initial calls. The lender will want to know what the current balance is on your mortgage, how long you have been in the home, what is your current interest rate, is the interest rate fixed or adjustable, and how much longer to plan to stay in the home before attempting to sell. Having these fundamentals available will save you extra phone calls, and help determine if refinancing is a viable option.
If you want to save money over the long run, and you decide to refinance, don’t make the mistake of refinancing for another 30 years. This completely defeats the purpose of the refinance. It will get you a lower monthly payment, but you’ll be making more of them, ultimately costing you much more than if you had finished the original loan at the higher interest rate. For example, if you have 16 years left on your current mortgage, refinance for 16 years. And always be sure to secure a fixed rate of interest. There are many specifics to the process that your Indianapolis real estate lender will be able to guide you through, but do your research first, so you know the questions to ask.
As the general and Indianapolis real estate economic patterns fluctuate, having a long standing mortgage may be one of your best resources if you are hoping to reduce monthly payments over the short term. This topic is not to be taken lightly, because it likely will cost you more over the long run, but if you are concerned about your financial stability and the ability to make your mortgage payments in the future, checking into a refinance plan that does extend the life of your mortgage may be in your best interest. Re-using the above example, if you have 16 years left on your current mortgage and need lower payments, you can refinance for 30 years, thereby considerably lowering your monthly payment.
Another consideration, although not so much in the current market, is how long you plan to stay in the home. When the Indianapolis real estate market was stronger, and the potential for a quick home sale was more secure, this was a topic to explore because every refinance has fees associated with it for paperwork processing. If your new monthly payment is $100 lower than it was before, and you paid $2000 in fees, you need to be in the home for at least another 20 months before you will actually begin saving any money. Again, in the current market, there are not many people who take out a new mortgage and then try to sell the property, but for future knowledge, the information is valuable.
Whether looking for a short term solution to a foreseeable financial crunch, or desiring to save money over the long term, it will not cost you anything to discuss possible refinance of an existing mortgage with several lenders in the Indianapolis real estate market. There is also never any obligation to accept any offer for refinance. Knowledge is power, and knowing what options are available, in today’s economic climate, will go a long way in securing your future.
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