Here are some simple, easy to follow, tips that can dramatically reduce your costs and fees when refinancing a mortgage. Many homeowners pay too much when they decide to refinance, and it is not necessary. Here are some insider tips to help ensure you get the best, cheapest, mortgage refinancing deal possible.

1)Be on the lookout for hidden Private Mortgage Insurance costs.
Especially these days with such a bad economy and housing market, many people find themselves with much less equity than they thought they had. Many times, if you do not have less than 20% equity in your home, you will need to pay for some sort of private mortgage insurance. A lot of people already are paying this and are not aware of it due to the fine print of their home loan. This can easily cost up to 3% of your total loan amount, which adds up to a lot of money. However, to avoid this fee try to borrow less money when refinancing so that you are within that 20% equity, and 80% borrowing threshold.

2)Know how long you plan to live in your home.
While the stability of a fixed rate mortgage is a great thing for many homeowners who plan on living in their home for a long time, it may not always be the best solution for people who plan on moving or selling their home within a few years. Typically, a shorter term mortgage, or even an adjusted rate mortgage, offer lower initial interest rates. In the case of ARM loans, the low interest rates can stay in place for a few years after the loan is signed off on. Many homeowners can save themselves a lot of money by knowing their future plans for their home and getting the appropriate loan type when they refinance. Smaller interest payments and lower closing costs and fees can save homeowners a lot of money when refinancing a mortgage, even if they only plan on living in the home for a few more years.

3)Paying off points beforehand may be better in the long run.
Although it seems hard to swallow at first, paying additional money mortgage refinancing points may save you a lot of money in the future. This is especially true for homeowners with an upside down mortgage or bad credit and financial situations. Paying off points ahead of time can save you a lot of money through the lower interest rates you are able to obtain when refinancing. Even 1% or 2% can add up to a lot of money over the course of the home loan.

Every homeowners situation is unique and will require its own special approach. However, these are good general tips on how to save money, or reduce costs when refinancing a mortgage. Homeowners should do as much research as possible prior to refinancing to help ensure they are getting the best deal possible. It is not as hard as it may seem, refinance now and secure your financial and homes future.

-M Petrone

Subscribe via email

Enter your email address:

Delivered by FeedBurner