When to Refinance Your Home

It Can:

When you refinance, you essentially take out a new loan, which can have a new term.

Shorter Term Option:

You can choose to refinance into a shorter-term loan to pay off your mortgage faster.

Longer Term Option:

Alternatively, you might opt for a longer-term loan to reduce your monthly payments, though you'll likely pay more interest over time.

Consider Your Goals:

The right term depends on your financial goals and priorities.

Temporary Impact:

Refinancing can temporarily lower your credit score due to the hard credit inquiry made by the lender.

Minimal Impact:

The impact is usually small and your score typically rebounds within a few months with responsible credit management.

Multiple Inquiries:

Multiple inquiries within a short period can have a more significant impact, so it's best to shop around for rates within a focused timeframe (usually 14-45 days).

Absolutely:

Refinancing is a common strategy for homeowners with ARMs who want to switch to a fixed-rate mortgage for more predictable payments.

Timing is Key:

Consider refinancing if interest rates are favorable or if you're concerned about potential rate increases on your ARM.

Evaluate Costs:

Weigh the closing costs against the potential savings from a lower fixed rate or the peace of mind of predictable payments.

Yes, with Alternative Documentation:

Self-employed borrowers can refinance, but they may need to provide additional documentation to verify their income, such as bank statements or profit and loss statements.

Specialized Lenders:

Consider working with a lender experienced in self-employed mortgages who understands the unique challenges and documentation requirements.

Non-QM Options:

Explore Non-QM loan programs that offer flexible income verification options for self-employed borrowers.

Limited Options:

Refinancing can be challenging if you're underwater on your mortgage (owe more than your home is worth).

Government Programs:

Explore government programs like the Home Affordable Refinance Program (HARP) or the FHA Streamline Refinance, which may offer options for underwater homeowners.

Consult a Housing Counselor:

Seek guidance from a HUD-approved housing counselor to understand your options and potential solutions.