Luckily for you, due to recent economic conditions, mortgage rates are near or lower than they ever have been across the country. Everyone is looking to save money, and these low rates offer a great chance to do just that. Refinancing your mortgage could save you hundreds per month, while owning and paying off your home with a lower monthly payment, fewer payments, or both.

Refinancing a mortgage to get better monthly payments is one of the best reasons to do it. Some people could just benefit from the extra cash every month, while others who are facing financial difficulties can use a refinance to help get out from under their debts. Sometimes a refinance can be longer than the length of the mortgage you currently have, although these extra payments are typically made up for in the overall savings acquired. Recently, mortgage refinancing applications have rose to record all time highs due to people seeking to refinance. Some are using that money they could save to help pay off other higher interest debts such as a car loan, tuition, credit cards, or whatever else you owe.

A lot of homeowners are refinancing out of their APR (Adjusted rate mortgage) which had low interest rates in its beginning but those rates have since risen, into a more stable fixed rate mortgage. This gives homeowners some stability in knowing that their payments will remain the same no matter what the market holds. A balloon type loan or mortgage payment is also a good thing to get out of now while mortgage rates are at all time lows.

Sometimes, it is actually a good decision for a homeowner to refinance into an APR. If you know you will not be living in your home for too many more years it may be right. Some APR mortgages have a fixed rate for the first 24 months or so depending on the loan and lender. These rates are usually extremely low and can help you if you know you will be moving. Beware though as you do not want to get stuck in a APR mortgage if plans to move fall through.

Also common, is refinancing in order to get a shorter term on your loan. If you are fortunate enough to be able to pay off your mortgage sooner than expected, you should. Owning your home should be your over number one goal. It is most likely the most expensive thing you will ever own.

You can also refinance to get cash back. It is not recommended as anything you borrow against your house will always need to be paid back, and your monthly payments will no doubt rise, or be extended by a long time. In some emergency situations it may be acceptable, but be careful and do not endanger your home for something that is not life threatening.

-M Petrone

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