Similar to getting your first mortgage, refinancing a mortgage requires work on your part, as well as knowledge and patience, if you intend to get the best deal. Begin research with your own credit score. Obtain a free credit report from any of the big 3 credit bureaus and start reviewing it promptly. You can correct any errors and try to right any credit wrongs you have committed prior to refinancing. Next, research mortgage trends across the country. Currently, mortgage rates are at all time lows across the country. Homeowners are rushing to take advantage of this situation and refinance their mortgage. Then be sure to do all the appropriate math and make sure the type of refinancing you are going to pursue is the financially smart thing to do. Most lenders websites, and even my own site here, have mortgage calculators on them in which you can get a rough estimate of your savings should you refinance. Learning the basics of your financial situation, and simple mortgage refinancing processes and necessary things does not have to be too difficult on yourself. You need to be confident enough in the different refinance options and various terms and conditions associated with refinancing a mortgage and know the effects financially it will have on you long term.

The first decision you should make when deciding to refinance a home or condo mortgage is the length of the new mortgage. A 15 year mortgage may have higher monthly payments, but it has much lower interest payments over its life. Alternatively, a 30 year mortgage has lower monthly payments, but you pay more interest in that extra 15 years. Make sure you know your reasoning to refinance and make the correct choice in terms of length and what you can afford in monthly mortgage payments.

The next thing to be concerned about when refinancing a home mortgage is interest rates. Interest rates determine how much you will ultimately pay to borrow the money to refinance your home. Basically, the higher the interest rate, the more the loan will cost. The lower the interest rate, the less you are wasting on interest fees with every monthly payment. If you are refinancing into a lower rate and want to actually benefit from the savings, you need to do the math and see how long you must make payments for before you break even on your refinance. Sometimes the savings to be had through refinancing a mortgage take years to actually be beneficial and that may be to long for some people. Make sure you are positive of your reason to refinance as well as your financial needs.

Do not forget to take into account the fees and costs associated with refinancing a home mortgage into account. Some mortgage lenders, especially in bad credit refinancing situations, add on enormous fees and costs. Hopefully you find a lender who give you a flat rate quote on a mortgage refinance. Fees and costs should always be disclosed ahead of time and carefully examined. This can save you money from avoiding shady and greedy mortgage lenders. Once you receive a mortgage refinance quote that is acceptable to you get it in writing. Shop that exact mortgage quote around to other potential lenders and see if they can match or beat it. More often than not they will. Good luck and be sure to refinance your home mortgage the right way.

-M Petrone

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