Looking into mortgage refinancing but are unsure of which option is best for you? With so many options available, especially with new Government programs, mortgage refinancing can seem confusing. Here is some information that can help a homeowner decide if refinancing is the right thing to do, and that will save them money if they do it.

Typically, a general rule of thumb is that if a homeowner can get a interest rate that is just 1%-2% better, they can save money by refinancing. However, there are some flaws with thinking like that. A better decision will be made if you carefully consider the total costs of refinancing, and how long it will take until you truly start to see savings from the refinance.

A homeowner is typically required to pay closing costs, points and fees at the closing. It is pretty easy to figure out how long until you recoup any expenses with a refinance. As an example, if the closing costs and fees are $2000, and you end up saving $200 per month, it will take you 10 months before you start to truly see a saving on your home loan payment. This is very important to know and be able to break down.

If you are well aware of how long it takes until you recoup your expenses from a refinance, and understand how much you can potentially save, than it probably is a good idea to get a mortgage refinancing. Even still, there are some reasons that a homeowner will not be able to recoup the expenses yet can still benefit from a refinancing. When getting a cash back refinancing it may not be possible to easily or quickly recover from the expenses associated. The final decision will always be made by the homeowner. The needs for refinancing, and the comfort factor of being able to recoup the closing costs, needs to be considered on an individual basis.

Once you have decided that mortgage refinancing is the right thing for you to do, the next step is finding a lender or bank to approve you. The fees, options, and total costs of getting refinanced vary depending on who you use. It is always best to shop around and compare several different lenders and offers to find the truly best one.

-M Petrone

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