Refinancingyour home is irresistible to homeowners who have a higher than average
interest rate on their house loan, or for those with adjustable rate mortgages
who want the rates lowered. The idea of refinancing is to pay less of your
budget each month on your home. With that said, how do can you know for certain
that you're getting the best deal? The following are criteria when refinancing
your home.
When to Refinance?
Most house owners believe that it's
time to refinance their home when the interest rates are lower than what they
are currently having to pay. While this seems logical, this isn't always the
best decision for everyone. When refinancing your home, ideally your current
home loan rate should be a minimum of two points above the market rate. If the
difference is only 1% point or so, then it's not worth it because you won't be
saving much and you will have to pay extra fees and closing costs.
Is it Worthwhile?
If you don't planning on moving out of
your home anytime soon, then refinancing your home is rewarding. If you are
unsure or know for certain that long term you will be moving, then staying with
your current house loan could be best. Before you ever sign any papers, always
get an estimate on closing costs and any additional fees. Each lender is
different when it comes to refinancing practices, so it may not be in your best
awareness to refinance if the fees are high and the money saved isn't enough to
justify it.
For more information: Refinancing your home
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