When you’re making your decision to refinance a mortgage or not, there are several things to keep in mind.
First, even a small mortgage refinance rate cut can pay off quickly. That’s because you can easily find mortgage companies willing to waive routine refinancing charges such as application, appraisal and legal fees. Of course, in exchange for low or no up-front costs on your mortgage refinance, you’ll have to be willing to accept a rate that’s somewhat higher than the prevailing rock bottom.
Refinance your mortgage and take advantage of today’s great mortgage rates!
Second, if you are planning to stay in your home for at least three to five years, it may make sense to pay “points” (a point equals 1% of the loan amount) and closing costs to get the lowest available rate on your mortgage refinance.
And third, you can avoid laying out cash and still get a low rate by adding the points and closing costs when you refinance a mortgage. Does that mean shouldering a lot of extra debt? Not necessarily. If you’ve had your current mortgage for at least three years, you’ve probably reduced your balance by several thousand dollars. So you may be able to tack your closing costs onto your new loan and still end up with a mortgage that’s smaller than your original one; plus, of course, a lower rate and lower monthly payment.
Know What is on Your Credit: One thing you should certainly do before you check into refinancing a mortgage is to get a copy of your credit report.
You should be aware of exactly what your report is saying to the people looking at your credit. Does your credit report tell the underwriter that you are a good credit risk and always pay back you obligations as agreed upon?
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Refinance a Mortgage – Five Things You Need to Know