Usually, refinancing a home mortgage is for people who for whatever reason can no longer afford their high monthly payments or cope with the high interest rates. With interest rates at near lows across the country, many homeowners are looking to refinance their home mortgage to take advantage. Unless you shorten the length of your mortgage due to a large influx of cash, usually refinancing a home mortgage extends the length of time it takes to pay off your home. This is a tough situation for homeowners who are facing the retirement age. Keep in mind that if you are say 55 years old and think refinancing a home mortgage is the right step for you, you will most likely have a mortgage payment until you are 85 years old, and a fifteen year mortgage until your 70.

Refinancing a mortgage is a great way to lower your interest rates on your home loan but always keep in mind that there are closing costs and fees associated with a mortgage refinance. Sometimes a lender will offer a no cost or low cost mortgage refinance plan but they usually make up for this in the interest rate extended to you. Typically it is common for homeowners who refinance with a no or low cost lender pay up to $3,000 more than they would have if they paid closing costs upfront. However, a lot of times the homeowner is struggling to keep their home and will have to do this to save it.

When looking into home refinancing compare different lenders and choose ones who have the lowest closing costs or none at all. You should only refinance if the interest rate you are eligible to get is lower than your current one. Do not ever refinance into a higher interest rate mortgage, even to consolidate bills. You can file for chapter 13 if you are up to date and on time with your mortgage payments to consolidate the bills you may have instead of risking your home.

Make sure that your are refinancing for the right reasons. Refinance for the wrong reasons and you may lose your home. Always practice patience and do some basic research before signing anything to ensure you get the best deal possible.

-M Petrone

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