1. Be aware of your home's equity- It makes no sense to refinance your mortgage if the current value of your home is less than the value at the time your mortgage was first taken out.
2. Be aware of your credit score, have high credit to be eligible for lower interest rates like 760 or higher score
3. Understand your debt-to-income (DTI) ratio- Your DTI ratio should be 36% or less, while some lenders will accept up to 43% with some additional favorable variables.
4. what is the cost of refinancing
5. Rates versus Term You should look for a loan with the lowest interest rate available over the longest period if you want to minimize your monthly payments.
Look for the lowest interest rate in the shortest period if you want to pay less interest throughout the course of the loan.
6. Refinancing Points Make sure to compare the interest rates and the points while evaluating different mortgage loan options.
7. Know Your Breakeven Point
8. Know Your Taxes- In order to lower their federal income tax payment, many consumers have depended on their mortgage interest deduction.
Your tax deduction can be less if you refinance and start paying less interest.
What Is the Price to Refinance Your Home? According to ClosingCorp, the typical cost to refinance a single-family home mortgage in 2020 was $3,398.