Knowing when to get a mortgage refinance can be tricky. Refinancing can bring big rewards and benefits for a homeowner. Sometimes though, it is not worth it at all. A decision to refinance a mortgage should be based on:

-How much lower of an interest rate you can get on the new home loan. Unless you are able to qualify for a lower interest rate refinancing may not be a good decision. If your interest rate is not lower through refinancing, you could end up paying thousands more than needed over the course of the home loan.

-How long you plan on living in the home. If your plans do not include staying in the home for too long, a mortgage refinance may not be a good thing for you.

-What type of mortgage you have. If you have an adjusted rate mortgage, and want a stable secure fixed rate mortgage, refinancing can provide that. Some homeowners may benefit from an ARM refinancing but generally, a fixed rate mortgage is the way to go.

-If you are paying private mortgage insurance (PMI). Many homeowners were forced to get this private mortgage insurance. However, refinancing may allow you to do away with this cost and drop the insurance.

-The total closing costs and fees. Closing costs and fees can quickly add up to thousands of dollars and take away any potential refinancing savings. Make sure you know the true costs, and calculate your savings from that.

-If you have any equity in your home. Many homeowners use the equity in their home to get cash back when mortgage refinancing. This is typically cheaper than getting a personal loan, and the money can be used however the homeowner wants.

Right now, with the economy like it is, mortgage refinance is a very popular option. Many homeowners are realizing that interest rates are very low and that they can drastically reduce their monthly payments by refinancing. Many homeowners also need to figure out how to lower their monthly payments in order to save their home from being lost. Refinancing can offer homeowners a chance to get a better, more affordable mortgage, and keep their home from being lost.

-M Petrone

Subscribe via email

Enter your email address:

Delivered by FeedBurner