There are many people who want to refinance but are not sure of the process so they don’t even bother applying. There is no set time to refinance but here we will try to explain refinancing clearly.

If you are absolutely confused by refinancing then don’t go on before researching some more. There are millions of people thinking about whether or not to refinance their current home loan. Throughout this article we will go over how to refinance and when to refinance.

Nowadays loans have interest rates of around 6%. All those homeowners with mortgage loans that have high interest rates have a great opportunity now to get a better home loan.

When to Refinance


In the past people went by different rules regarding refinancing. It was usually said that if you want to refinance your mortgage rate should drop a minimum of 2%. However, in today’s’ world it is best to refinance once you notice a decline in rates since the time you took out your mortgage.

This rule no longer applies because of two reasons.

First reason why it no longer applies is because the interest rates were much lower in the 80s. Since refinancing from 7% to 6% would have been the same as 14% to 12% back in the 80s it really does not apply anymore. Try to find out how long it would take you to recover loan cost once you have refinanced. If you are not charged a large amount the smallest reductions in the interest rates make refinancing worth it.

These days refinancing is a bit different no one is really sure when to refinance. What is recommended is that whenever you see an advertisement for a mortgage loan look into it if it offers lower rates than your current loan. Spotting lower rates can be because rates could have dropped since you applied for your loan or simply because you didn’t look well enough for the best loan.

When to refinance has no definite answer and those claiming there is should be avoided. No one knows when to refinance or where the interest rates are going from one day to another. Refinancing can be a difficult step be patient when looking for the best time for your situation.

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