When you refinance a mortgage, you are basically changing the terms, conditions, or interest rates, of your existing loan. Right now, mortgage refinancing is more popular than ever. Low interest rates and a bad housing market have made many homeowners look into a refinance. Here is some information that can help you plan for a home loan refinance.

1)Know why you wish to refinance your mortgage. Do you want lower monthly payments? Want to switch from an ARM loan into a fixed rate mortgage? Need to get cash back from the equity in your home? There are a lot of reasons a homeowner can want a refinancing. Knowing what you want, and need to come from a refinance is crucial, and will help you navigate the different options available to you.

2)Determine what the current average interest rates are for mortgages. Typically, a homeowner only needs to save 1% or more on their interest rates to see a lot of savings. These days though, mortgage interest rates are so low that many homeowners will be able to get a much lower interest rate than they have now.

3)In order to get approved for a mortgage refinancing, it always helps to have good credit, equity in your home, or both. Another important factor is how consistent you have been on making your mortgage payments, both on time and in full. Also, it is important that you set a new budget, and can prove that you will be able to make the new monthly mortgage payments.

4)Find the right mortgage lender or bank for you. Always compare the costs, benefits, and disadvantages of a variety of mortgage lenders. Lenders and banks have policies and fees that are wildly different from each other. Finding the right home loan for you starts with finding the correct mortgage lender or bank.

5)Always know the total costs and fees of a home loan refinancing before you sign anything. Also, try to pay as much as possible upfront so that you are not paying interest payments on their closing costs for the length of the home loan.

There many reasons why homeowners would want to get a mortgage refinance. However, always make sure that the long term is taken into consideration when deciding what to do. Many times, homeowners get themselves into a situation that will only help for the short term, and soon enough, they find themselves needing help again. Always do some basic research before refinancing a home loan.

-M Petrone

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