When Is The Right Time To Refinance
Home mortgage refinancing can be a great chance for many homeowners to make their home mortgage more affordable. Refinance loans allow you to take advantage of new offers for lower interest rates, which will lower your monthly payment. But taking out a refinance home loan isn't for everyone, and there are several things you should consider before deciding to refinance.
One of the first things to decide is how long you plan to stay in the house you currently own. A home mortgage refinance, even for a greatly lower rate, won't be worth the costs associated for at least 4 to 5 years after you refinance. Home refinance rates do save you a lot of money in the long run, but if you think you may be selling your house in the next decade, you'll have to seriously consider whether taking out a whole new home mortgage will be worth it.
But there are all kinds of reasons to refinance. If you're involved in an adjustable-rate, interest-only mortgage, switching to a fixed-rate mortgage can be a great way to make your payments more affordable and consistent. If you happen to have a lot of money on hand and are looking to pay off your loan more quickly, refinancing to switch from a fixed-rate to adjustable-rate mortgage may be worth it for your needs.
You can find refinancing deals at most banks, but you can also secure an FHA refinance loan from the government. FHA rates are often very reasonable, and many choose to refinance with the security of a federally sponsored loan.
If you're considering refinancing, talk to you your lender. Using your current lender is always a little easier when it comes to refinancing, since they already have all of your information and paperwork. But don't be afraid to shop around for the best home refinance rates either. Just remember to weigh the costs. Refinancing for a lower rate is about saving money over the long term. If you plan to stick around to reap the benefits, it may be the best home ownership decision you'll ever make.