The simple explanation of what home refinance or home loan refinance is a loan that equals to the balance owed that will change your current payment amount and current terms. Refinancing is recommended if you have an adjustable rate that is about to skyrocket, if you need cash liquidity, you have high interest rate or if you are trying to consolidate your debts. There are different options available when thinking of refinancing. If you refinance your current home loan you can alter your current loan for one with better terms and lower rates.
When to refinance

Homeowners with adjustable mortgage rates are urged to refinance so they can have a fixed rate. When do you refinance? No one knows when to refinance for sure it would really depend on the individuals financial situation and what financial goals you want to meet. Ask yourself:
-Are you willing to compromise for a lower interest rate?
-Are availing lowered payments worthwhile as compared to the cost incurred for the mortgage closing costs and the initiation fees?
-How long do you plan to occupy your home?
-How much equity have you invested in your home?

Refinance an adjustable rate to a fixed rate

It is always recommended to find the lowest possible fixed interest rate when refinancing. However you must consider your current financial situation and what you plan on doing in the future. If you have an adjustable rate mortgage (ARM) and your plans include moving out within three years, refinancing is not the step you should take.

Should you "lock in" an interest rate?

Predicting where the mortgage interest rates will be in the future is impossible but statistics show that when rates increase suddenly they tend to fall and become steady. So those homeowners thinking of refinancing their mortgage loans should act now and lock in a low rate. Refinancing later is always an option if the rates happen to drop even lower but the drop may not have enough impact on your monthly payment for it to warrant refinancing again. However, everyone’s situation is different so make sure to consider your options carefully and thoroughly before deciding what to do.

Estimated value of your home and its actual worth

A homes estimated value is decided by an appraisal and/or a comparative market, however its actual worth is really determined by what someone is willing to pay. The price the home would sell for is more of a practical price that is decided on by the lender or bank.

-M Petrone

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