Refinancing a home mortgage can be a great financial decision for a homeowner who purchased when mortgage rates were higher than they are now, or those in an ARM (Adjustable rate mortgage). In both of these cases refinancing into a loan with a better interest rate or a stable fixed rate will lower your monthly mortgage payment. Fixed rate mortgages are financially sound and great due to their stability and you knowing exactly what your payment will be every month for the entire length of the mortgage.
Heres 4 frequently asked questions that will help you along the way in your mortgage refinance.

Question: So, When do I Refinance?
Answer: For a almost a year now mortgage rates have been extremely low. As the rates started to go down, homeowners took advantage and refinanced their mortgage to get lower payments. That does not mean though that refinancing a home mortgage is the right answer for everyone. Generally, it is recommended that you should look into refinancing when mortgage rates are 2% or more lower than your current mortgage rate. Refinancing into a mortgage for less of a interest savings then that is not generally worth the time or upfront costs, and more often not even a good deal at all.

Question: So is it worthwhile to refinance my mortgage?
Answer: Mortgage lenders have different policies among themselves. Sometimes the lenders quotes or good faith estimates do not include closing costs or associated closing fees. It is always best to ask for a detailed break down of all fees and closing costs, from each potential lender, before signing anything. Sometimes refinancing will only give minimal results in which case it may not be a good idea to refinance unless you are going to live in the home for a long time.

Question: Can I compare different mortgage lenders refinance quotes?
Answer: When refinancing a home mortgage you should get in touch with your current lender first. A lot of times they will waive some associated mortgage refinance fees and cost . However, your mortgage lender may not have the best rates terms or conditions and therefore it is best to shop around for the best mortgage refinance package you can get. Use the internet to apply and compare a variety of mortgage quotes from known and reputable lenders.

Question: How much equity do I need to have in my home in order to refinance?
Answer: A good lender and refinance loan will require you to have enough equity in your current home. Generally the suggested time to wait before refinancing is 24 months. This should be enough time for the property to increase in value and you to gain more equity in your home.

-M Petrone

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