A Beginners Guide to Mortgage Refinancing

A Beginners Guide to Mortgage Refinancing

For most people who live in Sacramento, CA, the big challenge is getting a mortgage in order to buy a home, with the belief that once you’ve accomplished this, it’s smooth sailing. However, the road to paying off a mortgage is a long one, and with things like rising interest rates, there’s a lot to consider, such as refinancing your mortgage. But what exactly does it mean to refinance a mortgage? Once you’ve got one, aren’t you just locked into the terms until you pay off your debt, or sell your home and move out of Sacramento, CA? The answer to this is no, and here’s why:

What Does It Mean?

Refinancing a mortgage simply means getting a new mortgage to replace the one you currently have. This can be done with either the same financial institution you currently hold a mortgage with, or it may mean you’re approaching a completely different bank or private lender to do so. But in the simplest terms, you’re now closing your previous mortgage, paying off the remaining debt with the new one, and starting a new mortgage with a lower total compared to your previous one.

Why Refinance?

One of the biggest reasons that a homeowner would decide to seek to refinance on a mortgage is to take better advantage of the value of a home. As time passes, the value of a home naturally rises, which is one of the reasons why home ownership is superior to renting. Not only do you own your home, but it’s also worth more than what you paid for. Refinancing a mortgage is done when owners seek to get more benefits or value from a home. Owners get can lower interest rates, lower monthly payments, or even avoid mortgage insurance with refinancing.

When to Do It & The Cost

In general, most mortgage holders will require a homeowner to maintain the mortgage for at least one year. So, you can’t generally just hop into refinancing two months after you move into your home because rates are suddenly more favorable. In some cases, you should hold onto your mortgage until conditions change enough that you’re really encouraged to refinance. It’s also important to remember that there are costs associated with refinancing. You may need to pay a cost to close out your previous mortgage, especially if you’re going to a new lender. There may be an application fee, as well as a title insurance and title search fee. So be advised that several administrative costs accompany a refinancing

Refinance with AP Mortgage

When conditions are right in the Sacramento, CA market, refinancing can be one of the smartest things you can do for your home and investment! If this is something you’d like to look into, contact us and let us see what your refinancing situation looks like.

The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation

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  • "Jeremy helped me and my husband refinance our home. I strongly recommend him with any and all of your finance inquiries. My husband and I had a great experience refinancing our home."
    Carmen G., Home Owner
  • "Jeremy was really great to work with! He was very responsive to all of my requests and made the entire loan process very easy to understand. I highly recommend Jeremy to anyone looking to buy or refinance."
    Melanie J., Homeowner
  • "Jeremy at American Pacific Mortgage went above and beyond to help my wife and I navigate the mortgage process when buying our new home. Your service was invaluable and we hope to work with you again if we ever purchase another home."
    Cacilie W., Home Owner

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