Mortgage rates remain low enough to provide significant savings for homeowners, but it's important to consider the "big picture" before refinancing. Here are some questions that can help in deciding whether or not refinancing is right for you or not.
- Can you lower your existing mortgage rate? This one of the primary reasons for refinancing. Lowering your interest rate can help free up cash for paying off high-cost consumer debt, and a lower mortgage rate can save thousands of dollars over time.
- Can you prevent higher payments in the future? Many borrowers are enjoying low interest rates on their Adjustable Rate Mortgages today, but historically low interest rates won't last forever. Refinancing today to a new fixed-rate mortgage means you won't need to worry about rising rates and higher monthly payments tomorrow.
- Can you afford to reduce your mortgage repayment term? Reducing your mortgage repayment term results in higher monthly payments but can save thousands of dollars over time. Your results depend on how long you've had your existing mortgage. Use a refinance calculator to compare your existing mortgage with potential refinance terms at current rates and with a shorter term.
- What does refinancing your mortgage cost? It's easy enough to estimate potential savings by using a mortgage calculator to compare interest rates, but it's essential to factor in closing costs, points, and mortgage insurance when determining how long it takes to break even on a mortgage refinance. In some cases, the difference between your existing mortgage rate and current mortgage rates may not be enough to yield savings over and above the cost of refinancing. Using mortgage calculators can help with estimating results according to individual circumstances.
Getting mortgage refinance quotes from multiple lenders and using calculators can help you find refinancing at low rates
