Mortgage Refinance

Mortgage refinance
When it’s time to​ think about your mortgage refinance options,​ what should you​ know and how do you​ make the​ correct decisions? It’s more than guesswork and you​ can greatly increase the​ odds that you’ll refinance (or not) at​ the​ right time if​ you​ take time to​ consider some specific points.
Start by knowing your current mortgage interest rate .​
You can find this listed on​ your loan papers or​ your lender should be able to​ tell you​ .​
If you​ have a​ variable rate mortgage,​ you​ won’t have a​ set interest rate,​ but that’s also an​ important piece of​ information.
Next,​ find out the​ rate you’ll be offered if​ you​ get your mortgage refinanced .​
a​ word of​ caution – don’t simply take a​ look at​ the​ interest rates being offered and assume you’re going to​ get those rates .​
Ask about your specific situation .​
Lock a​ lender into a​ particular rate before you​ start the​ process .​
Many lenders advertise a​ very low rate,​ but you​ may find that you​ don’t qualify for that rate .​
Be especially careful if​ you’re being asked for any fees up front .​
Compare the​ rate of​ your current mortgage with that you’re being offered,​ but also consider the​ terms of​ the​ loan .​
For example,​ if​ you​ have a​ variable rate loan,​ you​ may find the​ benefits of​ having a​ fixed rate mortgage are sufficient to​ warrant a​ mortgage refinance,​ even if​ the​ rates you’re paying aren’t that much different from what you’re being offered .​
Most financial people recommend that you​ save at​ least one and a​ half full points on​ your interest rate before you​ consider a​ mortgage refinance .​
Why? You’re likely going to​ be paying closing costs,​ appraisal fees and other costs associated with the​ refinance loan .​
If you’re not saving at​ least one and a​ half full points,​ it​ will take you​ several years to​ save the​ amount of​ money you’re spending on​ the​ closing .​
Again,​ this doesn’t apply if​ you’re getting significantly better terms that in​ themselves warrant following through with a​ new loan.
As a​ final point,​ consider your future plans .​
Are you​ expecting to​ move in​ the​ next few years? Are you​ looking for a​ change in​ job status that could create the​ need to​ change your location? is​ your family growing and in​ need of​ more space? If you​ aren’t going to​ stay in​ your current house at​ least two more years,​ a​ mortgage refinance probably isn’t a​ good option because of​ the​ time it​ takes to​ recover the​ cost of​ the​ closing.

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