Knowing some basic facts about mortgage refinancing is one of the best ways to ensure you get the best deal possible. Getting a new mortgage through refinancing can be a complicated process, but this advice is so easy to follow nearly every homeowner will understand and benefit. Here is some advice to get you started with mortgage refinancing.

Basically, there are 3 different things which you need to understand prior to mortgage refinance. When looking at potential mortgage lenders and comparing their loan offerings, this advice will help you:

-The length of the mortgage
This is the amount of time which the mortgage will be paid off. Typically, home loans have 15, or 30 year lengths. However, with the recent hardships in the economy, 40 or 50 year loans are more common. The longer your mortgage is, the smaller your monthly payment will be. However, the bad part of a longer mortgage is the amount of interest you pay in the long run.

-The Mortgage Interest Rate
Your mortgage interest rate is the amount you will pay to have your loan financed over its length. Generally, homeowners will have the option of getting an ARM (Adjusted rate mortgage) or a fixed rate mortgage. While ARM loans may offer lower introductory rates, they come at the price of being adjustable with market conditions. Where as a fixed rate home loan offers financial security, and the home loan payment will never change from month to month.

-Fees and Closing Costs
Home loans generally have different fees and costs which need to be paid prior to them being closed. A lot of these fees and costs are from the actual lender or broker, and can be negotiated down. Shopping around to a variety of potential lenders is the best way to minimize these costs. Also, always be on the look out for a yield spread premium, and ask that it be lowered if it is there. Be sure you carefully compare different mortgage refinancing offers, and pick the right one for you.

-M Petrone

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