How to Refinance Your Home After a Major Life Event
Life changes, whether expected or unexpected, can impact your finances, and refinancing your mortgage might be a smart way to adjust. If you've gone through a major life event—like marriage, divorce, the birth of a child, a job change, or the loss of a loved one—refinancing your mortgage could help you better align your home loan with your new circumstances.
Why Refinance After a Major Life Event?
Here’s how some common life events can affect your mortgage needs:
Marriage: You may want to add your spouse to the mortgage or combine incomes for better loan terms.
Divorce: You might need to refinance to remove an ex-spouse from the mortgage or adjust the loan if you're now on a single income.
Birth of a Child: Refinancing could help you access home equity for renovations or adjust payments to accommodate new expenses.
Job Change: A change in income may require refinancing to secure a loan with better terms or lower monthly payments.
Death of a Spouse: You may need to refinance to adjust payments or take the mortgage over solo.
Evaluate Your Financial Situation
Before refinancing, assess your credit score, income, debt, and home equity. A higher credit score or increased equity can help you secure a better rate, while a drop in income could make refinancing a good way to lower monthly payments.
Explore Your Refinancing Options
There are several types of refinances to consider:
Rate-and-Term Refinance: Change the interest rate or loan term to secure better terms or lower payments.
Cash-Out Refinance: Access some of your home’s equity for major expenses.
Streamline Refinance: If you have a government-backed loan (FHA or VA), this option may have fewer requirements and a quicker approval process.
Gather Your Documents and Shop Around
To refinance, you’ll need documents like proof of income, your current mortgage details, and any relevant life event paperwork. Shop around to compare quotes from multiple lenders to find the best deal.
Understand the Costs
Refinancing comes with closing costs (usually 2-5% of the loan amount), as well as fees for appraisal and title insurance. It’s important to weigh these costs against potential savings before proceeding.
Conclusion
Refinancing after a major life event can help you adjust your mortgage to your new situation, whether that’s lowering payments, accessing equity, or securing better loan terms. By evaluating your finances and exploring your options, you can make an informed decision that supports your financial goals. Reach out to an Imagine Home Lending Loan Officer today to get started on your refinancing journey.