As opposed to constantly switching mortgage lenders, a homeowner can instead refinance their home mortgage and have a choice of any lender they choose. Typically, homeowners switch use refinancing to switch mortgage lenders, and take advantage of a lower interest rate.

For example, if Wells Fargo offers you an introduction rate of a fixed 2.99% for 36 months, that means that after those 36 months, the interest rate will go back to its standard variable interest rate. If a homeowner can save, say $3,000 per year, a homeowner can use that money and pay off an extra $3,000 on their home at the end of the year, and next 2 years. This will effectively reduce the mortgage total by $9,000, in just 3 years.

As your three year introductory interest rate expires, it is wise to search for a new mortgage lender or bank which provide another, although maybe not so low, introductory rate. Then you can basically do the same thing over and over again. The savings that can be had by doing this can easily add up to the tens of thousands of dollars by the time you pay off your mortgage.

-M Petrone

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