Home Loan Refinance - California Home Loan Refinance

If you have a refinance California home and are interested in lowering your monthly payment, this is the time to do it. The first steps involve determining both short and long-term goals, followed by evaluating the various types of refinance programs available. Then, you want to work with an experienced lender that can walk you through the process so you make informed decisions.

When considering a California home loan refinance, start by looking at your current interest rate paid. Chances are your home was purchased during a time when interest rates were significantly higher than they are today. By locking into lower rates, the monthly payment on your California home could be reduced by choosing a loan to refinance. However, if your home already has a low interest rate then a refinance loan may not be the right choice.

What Makes Sense - Get Rate Quote

Generally, it used to be that refinancing made good sense from a financial perspective if your interest rate was at 2% points higher than what was being offered in the current market, and if you were planning to live in your home for a minimum of three years. The reason was that this 2% was needed to recoup the fees associated with the refinance.
Refinancing would make sense if you can refinance and not pay any points or fees. In addition, the length of time living in the home would also be a consideration again because of refinance costs.
When it comes to your California home refinance, let us start by saying that any loan where the lender would pay all the closing costs is called a "no-cost" loan.

Now, keep in mind that a true no-cost loan is very different from a "no lender fee". Sometime, homeowners get these two confused. With the no lender fee, which you will often see offered by banks, means fees are covered excluding the title, escrow, and any other outside charges. Therefore, you are still paying costs to close on your California home loan to refinance. Now, with the no-cost loan, or sometimes called a "no closing cost" loan, any incremental drop in interest rate can be refinanced. The reason is that transaction costs are zero. Keep in mind that a no-cost loan makes great sense, even if it seems as though the market will continue to drop.

With this, even if the rates continue to decrease, nothing has been invested for the loan costs, meaning you can refinance at any time. In fact, there are some homeowners that refinance annually or more. The bottom line is that if you have a California home and you want to take your loan through a refinance, you should definitely consider this a viable option. Just be sure you understand exactly what you will pay and to whom. To do this, you can request a Good Faith Estimate, which will outline every single fee.

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