Home » World

Mortgage Refinance: What You Need to Know

Posted: October 14, 2010 at 10:12 pm 6,117 views No Comment

If you are considering refinancing and want to know if refinancing will be worth it, consider if your interest rate is at least 2% higher than the going rate you will be saving money. Remember there are expenses involved with refinancing; less than 2% and it might be a while before you break even.

There are of course other reasons to refinance; cashing out equity in your home is one such reason.

You may be sitting on the fence when it comes to refinancing your mortgage because of a possible move in less than five years. It does not make sense to commit to a 30 year mortgage if you have to turn around and sell in five years right? If you think a move might be coming up in your future you can still take advantage of low interest rates by using a hybrid mortgage loan.

A 5:1 hybrid mortgage for example offers a low fixed interest rate for the first five years. After 5 years the interest rate becomes adjustable and your lender will adjust the interest rate every year after that. Find a lender that does not have prepayment penalties and you can sell the home after 5 years and still benefit from lower interest rates.

If you are refinancing for the long term you might want to consider prepaying points in exchange for a lower interest rate. Points or “discount points” as they are often called, represent 1% of the loan amount and are paid at closing in exchange for a lower interest rate. Many lenders require points; however, you can use points as a bargaining chip with lenders that do not in exchange for better a better interest rate or even more favorable terms. To learn more helpful tips that could save you thousands on your mortgage loan, sign up for a free guidebook to mortgages and mortgage refinancing using the links below.

Louie Latour - EzineArticles Expert Author

savannah mortgage refinance

Louie Latour has twenty years of experience in the mortgage industry as a mortgage broker.

He is the owner of Mortgages Refinance Advisor, a mortgage help site devoted to saving homeowners money with a free guidebook Mortgage Refinance: What You Need to Know.

Sign up for your free guide today at: http://www.refiadvisor.com

1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...

Leave your response!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.