When you have decided that a home mortgage refinance is the right thing to do, you then need to research your refinancing options. There are different options for you depending on your personal financial situation, such as a cash out refinance, or a no cost closing costs. Having the right questions to ask a potential mortgage lender is the key to not getting yourself into a costly decision. If done right, with mortgage rates at all time lows as they are now, you will save a lot of money.

Do not neglect any long term financial goals that a refinance can effect. Sometimes a good deal can be had for short term financial gains, but usually these type of dealings will throw off your long term plans. Sometimes a no cost or low cost refinance may not be the best option, or save any money for you.

Most of the time, a lender who advertises free or low cost closings are actually overcharging you in other areas. A lot of the time these extra costs are buried in fine print and most of the time you will never notice them without careful examination. A real no cost closing would mean that the mortgage lender will pay all closing and associated fees without jacking up your interest rate, or otherwise increasing the total value of the loan.

You can save thousands of dollars if you can refinance into a mortgage rate that is as little as 1% (Hopefully more) and get a true no cost refinance. Make sure to double check all contracts and agreements throughly before signing anything. This way you are aware of the true costs and make sure there are no hidden expenses.

Refinancing out of an ARM (Adjusted rate mortgage) and into a stable fixed rate mortgage is a popular option for a lot of homeowners. Usually, this can be a good decision, especially with the low mortgage rates available right now. However, it is not always the right choice. For instance, if you are only going to live in your home for a few years, it might be smarter to keep the low ARM rate and sell the house before the mortgage adjusts too high.

So when is it not a good time to refinance my home mortgage then? To truly see the benefits of home refinance, you must live in the home long enough to see the savings of a refinance. This is commonly referred to as the”Break In” time. The break in period is the amount of time it takes for the lower interest you got through refinancing makes up for the costs of the mortgage lender.

Refinancing your home mortgage can be one of the most important decisions you can make. If it is done wrong though it will cost you thousands of dollars. However, by doing proper research and asking the appropriate questions of potential mortgage lenders, you will save money. The money you save can be used for anything you wish, and can often be the few extra dollars you need every month to tie your finances all together.

-M Petrone

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