If it makes financial sense and cents to refinance then don't wait. I just re-pulled credit for a loan applicant and his credit score went down by 50 points from 6 months ago. Why? Because they paid a department store credit card late in January. Is this a drastic reduction in credit score? Yes. However, recent credit history is the most important when it comes to your credit score and the credit scoring scoring system decided to wave the red flag with this 30 day late payment.
Let's go back to September when the credit score was 694. Why did this customer decide not to refinance at that time? He wanted to get his credit score higher in hopes of getting a better rate/terms. I encouraged him to refinance at that time for 2 reasons
- It made financial sense to refinance at current rates and his current credit score
- Interest rates might go up by more than any advantage he may gain by a higher credit score
Fast forward to March 2011, rates have gone up by more than the credit score would have helped him and his credit score went down. Failure to refinance back in September will cost this customer about $125 in extra interest costs per month he keeps his current loan. In other words probably thousands of dollars because he told me he was not planning on selling his house anytime soon.
Moral of the story: If after we review your financial situation and goals, we decide it makes sense to refinance -- JUST DO IT!! Call me, Mark Nehs, today at 262-347-2953 to review your finances and determine if now is the right to time to refinance.
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