When someone refinances their home, the new loan will ideally have a lower interest rate, making monthly loan payments lower, while still owning and financially responsible the same home. Before a homeowner decides that refinancing is the right decision, make sure you do some simple calculations to know what is needed to meet your financial goals.

Currently, home mortgage interest rates are at near all time lows all across the country. The decision to refinance a home loan may be a very simple one for some homeowners who stand to save a lot of percentage points in interest due to the current housing market conditions.

However, not all homeowners will automatically qualify for a lower mortgage rate just because one is available from a lender. Typically, to get the lowest rates possible, the homeowner must have great credit and equity in their home. Refinancing usually makes sense if a homeowner can obtain a home loan interest rate which is 2% or more lower than their current rate. If you are still uneasy about refinancing a home mortgage on your own, think about consulting a mortgage broker who will assist you, for a fee, on obtaining the best deal possible when refinancing a home loan.

Homeowners must know what they want and expect from a mortgage refinance or modification. The expectations are sometimes unrealistic compared to the actual loan that will be offered. This is why it is very important to know the math behind the mortgage numbers. Know how much you pay now, what your interest rate is, how long remaining on the loan, and how much remaining on the loan. These will help you zero in on the best refinancing option possible to meet your needs.

-M Petrone

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