Your home is most likely your most significant financial investment. When you purchased it, your mortgage loan used your home as collateral. This provided you with financing to obtain your home in exchange for regular mortgage payments. A mortgage refinance loan essentially replaces and reduces your current home loan rate, allowing you to streamline your finances.

Should You Pay Off Your Mortgage or Refinance?

A good mortgage rule of thumb is to refinance if rates are around 1-2% less than your current rate. When interest rates are low, it can be a good time to refinance your mortgage and save money. In addition to lowering your monthly payment, refinancing can help you access some of your home’s equity, consolidate debt or change your loan program to a better one. Make sure to factor in all of the closing costs and fees associated with refinancing.

Common Refinancing Questions Answered

As you navigate the refinancing process, you probably have a few questions. Here are answers to the most common questions:

  • How do you refinance a mortgage? Refinancing a mortgage essentially requires the same steps you took to qualify for your loan. You’ll need to meet the lender’s requirements, complete an application, complete the underwriting process and then go to closing.
  • How soon can you refinance a mortgage? This can vary depending on individual banks and lenders. Most lenders require that borrowers wait anywhere from six months to a year before refinancing.
  • How often can you refinance a mortgage? Most lenders do not have any rules or regulations for how often you can refinance. If it makes financial sense, you can refinance as many times as you want. This means you can refinance your first and second mortgage.
  • What to expect when you refinance your mortgage? Unlike a mortgage, which is used to pay for a home, when you refinance you are getting a new mortgage to pay off the balance on your original home loan.
  • What are current mortgage refinance rates? In March 2020, the Federal Reserve dropped interest rates. In April, the average was less than 4%. Homeowners with excellent credit can receive the lowest rates.
  • What is the mortgage refinance timing and process? Timing can vary due to different factors. In general, you can expect the process to take somewhere between 20 to 45 days.
  • How to refinance a home mortgage with bad credit? While it may be riskier and more difficult to refinance a mortgage with bad credit, there a few things you can do to prepare before you apply. First, try to minimize debt. You also don’t want to make any moves that could negatively impact your credit score such as applying for new credit cards.

The PeoplesBank Solution

At PeoplesBank, our refinance mortgage lenders will find the best mortgage options for you. We lend in both Pennsylvania and Maryland, and our refinance loans are available for primary residences, investment properties and vacation homes. Our process is easy and even gives you the opportunity to include your closing costs in your new loan.

We also offer fixed rate and adjustable rate loan options as well as:

  • Financing for up to 95% of the appraised value for rate or term reduction finances
  • Financing for up to 80% of the appraised value for cash out refinances

Whether you need a 15-year or 30-year loan, we will work with you to find the best solution. Take a look at our mortgage financial calculator to get estimates on the loan amount you can afford, what your mortgage payments might be and what your refinancing options are.

How to Get Started and Pre-Qualify for Refinancing

To refinance your mortgage, you’ll want to first:

  • Figure out what your home is worth via an appraisal
  • Research your loan options
  • Determine all the fees and costs
  • Gather required documents and paperwork

Get pre-qualified online with our quick and easy form!

Learn More About How PeoplesBank Can Help You Reach Your Goals

At PeoplesBank, we have been serving our local community since 1864. We serve as financial mentors, offering tailored mortgage and loan solutions for each client’s needs. Contact us today if you have any questions about homeownership or our refinance options. We look forward to helping you achieve your financial goals and dreams.