Simply put, refinancing a home mortgage may let you have lower monthly mortgage payments by getting a new home loan with a better interest rate, terms, or conditions. This will allow you to have extra money every month which you can use for whatever you want. You need to compare home equity rates from several different potential mortgage lenders to get a average for the market. You can also refinance and take out some of the equity in your home and turn it into cash. Mortgage rates are at record lows across the country and the rush from homeowners to refinance is on. After a refinance you will still be able to deduct the interest paid on your mortgage from your taxes. I have included some tips below to help you refinance your home.

-Research all of the current interest rate information you can. You can use the internet or even newspapers in the financial section to get current rates. You can call mortgage brokers or potential lenders as another source of information as to the current mortgage rate information. Also keep in mind, the rates will be different depending on length of loan, your credit, down payment, and other things. The rate that is the national average may not be the same rate you actually can get.

-Be aware of which type of mortgage loan is right for you. You can choose an ARM (Adjusted rate mortgage) or a stable fixed rate mortgage. There are advantages to both but it is often better to get a fixed rate. Although it is possible to get a mortgage that is an arm that turns into a fixed rate or vice versa.

-Know whether refinancing a home mortgage is even going to save you money. You should compare refinance quotes from potential lenders to your current mortgage terms and rates. In general if you can refinance into a loan that is just 1% or hopefully more lower in interest than your current loan, you probably will save money by refinancing.

-Do the proper calculations and double check them. You can find mortgage calculators on sites like mine and many other lenders websites. These will take rough figures about your home, down payment, loan length, and loan amount and give you a rough idea of you much money you can save. Take account of any closing costs or fees associated with your refinance. Often you can add these fees to the total loan amount however that is not recommended. It is better to pay them off in full at the closing to avoid paying unnecessary extra interest making the fees even more unbearable.

-Make the correct choice now that you know the basics of refinancing a home mortgage. Now you can figure out if you are going to be living in your home long enough to see the savings that you can get with a refinance. Generally people are able to break even and start seeing savings from refinancing within 4 years, hopefully less.

-M Petrone
RefinancingCondo.com

Subscribe via email

Enter your email address:

Delivered by FeedBurner