Usually refinancing a home mortgage is done to obtain a lower interest rate in order to make your monthly payments smaller or to increase the loan length to have a lower mortgage payment. Sometimes people choose to shorten their mortgage to save on interest. A cash out refinance is yet another option. This is where you refinance for more than you owe on your mortgage but less than the home is worth and pocket the difference in cash. Generally it is best to use this money for home improvements or repairs. These things increase the value of your home. Refinancing a mortgage is a good way to regain some control of your money. Refinancing out of an ARM (Adjusted rate mortgage) into a more stable fixed rate mortgage is popular. A lot of people got lured into an ARM loan with super low rates and low or sometimes even no money down plans for owning a home. Now, the low rate period has expired on a lot of those loans and the rates have skyrocketed. The homeowners stuck with an ARM loan are at the mercy of the mortgage lender. Right now mortgage rates across the country are at or near all time lows and refinancing into a fixed rate mortgage is a good idea for a lot of homeowners. Sometimes a homeowner faces a huge financial burden and needs to do a cash out refinance. An example of this is if you owe $25,000 in 10 years on your mortgage and refinance into a $50,000 loan and pay it off in 20 years, you will pocket the $25,000 difference.

A lot of homeowners can save a lot of money every month on their mortgage payments by refinancing. Of course it is dependent on your personal financial situation that will effect the results of a mortgage refinance. The rush to refinance is on and applications for refinancing are at an all time high. Do a lot of research on any potential mortgage lenders before doing anything and feel comfortable with the terms. A lot of lenders have mortgage calculators like the one on my site which will give you a good idea of how much you can anticipate to save. Once a potential mortgage lender gives you a refinance quote get it in writing and have it signed. Give that quote to other lenders and most of the time they will match or beat it in some way. Whether they give you a better mortgage rate, terms, or conditions often times they will beat it somehow. This gives you even more flexibility in making sure you refinance the right way. Closing costs can be a few thousand dollars and it is suggested to pay all of as much as possible of these fees upfront. Paying interest on these fees for the length of the loan is a waste of money.

-M Petrone

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