Throughout this article we will be going over refinancing a home mortgage loan. In today’s economy refinancing has become a popular subject. Many people are considering refinancing, and need to save money. The whole refinancing process can be confusing and stressful, but you should not feel lost if you need someone to help explain the process to you. Knowing when to refinance or how to go about it can, and does, intimidate anyone.

There are many people that who wanted to purchase a home so they took the first option they were offered or the best one they thought they would be offered. Once they were given the loan for the home they were happy but once those payments came along many began to think that they could have gotten a better deal on the loan. There are those who have a better financial situation now then when they first got the loan and feel that they can now demand more than before. Whatever the reason may be there are a few things that you should consider prior to refinancing. The end result has to be worth the stress and hassle of refinancing.

What happens when refinancing is you are creating an entirely new loan that is used to repay the initial loan. If you are thinking of refinancing a loan that you have had for some time now you will not have to take out a big loan. Instead you will be shortening your loans length, getting better terms and lowering your monthly payment altogether. This can save you hundreds of dollars a month just by lowering your interest rate.

First thing you have to think about is the interest rate. It is said that in order to make mortgage refinancing worth the time and stress the new mortgage rate should be at least 2% lower than your old loan. This is recommended unless you have an adjustable rate that is about to skyrocket.

Also always make sure to carefully go through your mortgage documents and make sure that there are no hidden extra fees, prepayment fees. If you do have these type of fees you have to make sure that the total costs won’t cancel out any possible savings. Some lenders try to advertise themselves as not charging closing cost but what you must remember is that they do it is just included in some other fee that they will charge. Knowing when to refinance is tricky but if done correctly and with patience it can be a great tool to save money.

-M Petrone

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