Refinancing

With home mortgage rates at an all time low, there are many reasons you might be considering refinancing your home mortgage.

• You might want to take advantage of a better refinance rate, which can reduce your monthly payment or the term on your loan.
• You might consider consolidating other high interest debt into one loan to take advantage of the lower interest rates a refinance could offer.
• Refinancing could reduce your monthly payment amount.
• You would like to free up cash for other uses.
• To change the type of mortgage loan that you currently have (e.g. switching from an adjustable rate mortgage to a fixed rate).
• Or to get rid of Private Mortgage Insurance (PMI). PMI is usually required at the start of a home mortgage when the borrower pays less than 20% of the loan value for the down payment. A refi can save you a good bit of money by dropping the PMI if you have enough equity built up in your home.

All of these are great reasons to refinance mortgage rates, but there other things to consider before refinancing.

• Do you have at least 10% built up equity in your home?
• Is the new interest rate going to be 2% or lower than the original rate? Anything less and you will probably not recoup the closing closes of the new loan.
• Have you had any late payments on your current mortgage in the last 12 months?
• Has your credit score dropped substantially since your last mortgage finance?

While reconsidering the refinance mortgage rates, examine your situation and decide which loan program you should apply for.

• If you want to cash out the equity in your home, consider a home equity loan.
• Maybe you have decided to do some home improvements, add a room, or any other improvements to the property, consider getting a cash-out refinance mortgage, a home equity loan, or a line of credit.
• You need a loan amount for below $300,700, you need to look at a conforming fixed rate loan.
• If the loan amount if over $300,700, a jumbo fixed rate is the loan you need.
• Planning on staying in your home for over five year, consider a fixed rate refinanced mortgage.
• Maybe you are flipping houses or have decided to move and sell within five years, you should consider an Adjustable Rate Mortgage.
• You finally can afford that vacation home you always dreamed about. A 30 year fixed rate mortgage would be the right one for you.

Refinancing mortgage rates on your home can be a great option to save you money. Just make sure you consider all your options before jumping in, education is the key to getting the best terms and rates possible out of the current home refinance rates.