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Money/Finance

Is now a good time to consider home loan refinancing?

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Relatively low mortgage interest rates are encouraging homeowners to consider restructuring their finances.

According to the Mortgage Bankers Association, refinancing applications are a significant portion of all mortgage applications.

Before you consider home loan refinancing, it is important to understand your individual circumstances including your home’s equity, your credit score and the costs associated with refinancing. Common refinancing fees include appraisal fees, title work and recording fees associated with typical costs of a home loan.

“Typically, it is beneficial to the borrower to refinance if the interest rate can be reduced by 0.5-1 percent,” said Amy Trease, residential loan officer and Assistant Vice President at FNNB Bank. “At that rate, the lower payment will help absorb the closing costs to make the refinance worthwhile.”

Some benefits of refinancing your mortgage include lowering your mortgage rate, which in turn lowers your monthly payments. You may also want to consider refinancing if your credit situation has improved, allowing you to receive a better interest rate.

With a cash-out refinance, you can borrow money against your home equity to obtain funds for any purpose. You will receive a check at closing, which can be a very cost-efficient way to borrow money.

“Some borrowers will have the need to refinance regardless of the interest rate, whether funds are needed for home improvement, debt consolidation, vacations or weddings,” Trease said.

Current refinance rates are determined by your credit score, home price and loan amount and loan type, among other factors. Talk to an experienced loan officer at FNNB Bank today for more information on home loan refinancing.

FNNB Bank : 100 N. 2nd Ave. W., Newton, IA 50208 : 641.792.3010 : www.fnnbbank.com