Mortgage interest rates are at historically low levels and many homeowners are taking advantage of these low rates to refinance their mortgage loans. Is refinancing a good idea for your mortgage? To answer this question properly you should consider all the options available to you and do your homework first.
To start, look at your present mortgage loan balance and the interest rate you are paying. If you have a fairly new mortgage that has an interest rate higher that the going rates you could benefit from refinancing the loan. However, if you have paid a significant amount of your mortgage down refinancing may not be the best option for you. It is very important to do your homework and brush up on Mortgage terminology prior to filling out mortgage applications. This step alone could save you thousands of dollars. You will also be able to avoid common mistakes new homeowners make.
You will need to have a solid idea of what your monthly budget will be and what your credit score is. One of the main reasons for refinancing a mortgage loan is to lower your monthly payment. A side benefit of this should be to pay less in interest over the life of the loan. You will have to balance having a lower monthly payment with having to carry the loan longer.
To decide if refinancing your mortgage is the right thing for you consider all your options. Are the loans you are considering fixed interest rate or adjustable rate mortgages? (ARM) Will you get the monthly payment you need to safely budget your money? Can you make extra payments to pay off the principal sooner? Many lenders offer bi-weekly payment options that can save you thousands of dollars in interest payments over the life of the mortgage loan.
To learn more strategies for saving thousands of dollars when refinancing your mortgage loan sign up for our free eZine: “Five Things You Need to Know When Refinancing Your Mortgage.”