Considering a refinance, but still not sure? Sometimes, what holds homeowners back from refinancing is believing in common myths. Below, we go over some of these misconceptions with you so you can make a more informed choice about whether or not to refinance.

The Myths of Refinancing That You Still Hold On To

1. Refinancing is free. Some people believe that it does not cost anything to refinance. This is not the case. In order to refinance, you will pay fees and closing costs. When you work with us to refinance, we will make sure you are clear about the costs upfront. We also will help you calculate whether the financial benefits of refinancing will be enough to offset those costs. If it is truly the right time to refinance, doing so should eventually pay for itself.
2. Loan terms are not flexible. It is a common situation when refinancing for the loan term to reset. But some lenders are flexible with the loan terms you can choose, so this should not be something that necessarily holds you back from refinancing.
3. Selling the home later might not be possible. Homeowners sometimes worry that if they refinance, their home equity will be the collateral, which means that if they want to sell the home later, they will run into snags. But that is not how refinancing works. You should not confuse a refinance with a home equity loan. There is no second lien. You are free to sell the home whenever you want.
4. Your equity will decrease. Sometimes people worry that they will have less equity if they refinance. The reason they are concerned about this is because if you get a cash-out refinance, you do tap into your home equity. That in turn causes your equity to decline. But that only applies specifically to cash-out refinances. If you are not taking cash out, there is no reason for your equity to decrease.
5. Refinancing is not possible with your current equity. It is commonly recommended that before refinancing, you make sure you own at least 20% equity. The reason for this recommendation is that if you have 20% equity, you can avoid paying for mortgage insurance. In fact, if you are already paying for mortgage insurance, refinancing with sufficient equity can prevent you from having to continue paying for it. But that does not mean that it is impossible to refinance if you do not have 20% equity. Just be aware that in scenarios like this, you may have a mortgage insurance requirement. But if the other benefits outweigh that added cost, it still might make sense.
6. The refinancing process is complicated. When you refinance, you do need to go through an application and approval process which involves submitting documentation. But this process is not especially complicated, and is fairly similar to what you remember of applying for your mortgage when you bought your home. When refinancing, the same basic factors are assessed. So, it should not be too difficult to provide your documents, especially when our friendly team is here to walk you through it.
7. You cannot refinance now because you did it already in the past. A common misconception about refinancing is that you can only refinance a single time. But that is not true. You can refinance the same mortgage as many times as you want, in theory. The only reason you would not want to do so frequently is because every time, you have to pay the fees and closing costs. For that reason, you should only refinance when necessary. But you do not even need to wait all that long since your last refinance. You can even refinance more than once in a year.
8. You have to go through the same lender. Homeowners looking to refinance often default to doing so through the original lender for their existing mortgage. In some cases, it is because they believe that is always the way to get the most affordable rates. In other cases, they might not even realize that going elsewhere is an option. But you do not have to go through the same lender when you refinance. And in some cases, you can find better deals elsewhere. Even if your existing mortgage is through another lender, we can work with you. We might very well be able to help you save more than your current lender.

Refinance Quickly and Easily with MMS

During your consultation, you can ask us your questions about refinancing, and we can help you clear up any myths or misconceptions you believe about the process. If you decide to proceed, we can move you quickly through the refinancing process so you can start saving on your mortgage.

To get started now, please call us today at (248) 788-0800 to schedule your consult. We can help you refinance in Michigan or 15 others states.

If you have been considering refinancing, you probably know that one of the most important things to do is to make sure that you are getting the timing right. This can make the difference between whether or not a refinance is worth it.

To help you think through your scenario, we have put together this list of indications that the time might be right for moving forward with your plans to refinance.

Things To Consider If You Plan To Refinance

1. Your qualifications are competitive. When you apply to refinance, we will be looking at the same factors we assessed when you first took out your home loan. These include:
   
   – Your credit score
   – Your debt-to-income (DTI)) ratio
   – Your income.
   
   If your qualifications are in great shape, they should help you apply successfully for excellent rates and terms when you refinance.
   If any of these measures of financial health are not as high as they could be, you might be better off working on improving them a little bit more before you apply.
   
2. You are paying a higher rate than what is typical right now. Check your current mortgage rate against the going market rates. Are you paying significantly more than other homeowners right now? If so, think about how much money you could potentially save over the coming years if your interest rate were in line with current rates. With the right qualifications, you could soon be paying much less.
3. The benefits of refinancing will outweigh the costs. Once you know how much you could feasibly save on interest with a refinance, you can compare that amount against the likely cost for the refinance. There could be other financial benefits that go with refinancing as well. For example, by adjusting the term of your loan, you could pay a higher or lower amount each month. There are also scenarios where refinancing can help you quit paying PMI, saving even more money. After you do the math, if you calculate that the advantages of refinancing will more than make up for the costs, it is logical to proceed.
4. Refinancing will reduce your stress. The financial advantages of refinancing may not be the only reasons you are thinking about doing it. You might also be wanting to refinance because it could simplify your life in some way, reducing your overall stress. If you know you will feel better emotionally after refinancing, and you calculate that it makes financial sense, that is another sign that it is time to move forward.

We Can Help You Figure Out if a Refinance is Right for You

Still not sure if this is the right time for you to refinance? MMS Mortgage Services can help you weigh the pros and cons during your consultation and calculate how much you could save over the lifetime of your loan. To get started now, please call us today at (248) 788-0800 to schedule your consult. We can help you refinance in Michigan or 15 others states.