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Why Refinance?
There are many reasons why you might want
to consider re-financing your existing mortgage. You may want
to get a lower interest rate, lower your monthly payments,
or free yourself from an impending balloon payment. Whatever
the reason, make sure you understand what is involved in a
refinance mortgage.
There are certain steps that you should take to avoid paying
too much. If you are thinking about refinancing your existing
home loan, you should check the interest rates on your mortgage
and see if refinancing your mortgage will save additional
funds.
The problem is knowing when to refinance.
Some say that it is safe to refinance if the current interest
rate on your home equity loan is at least 2 percentage points
higher than the prevailing market rate. This amount is usually
a safe margin when trying to balance the costs of refinancing
a mortgage against the savings.
It is possible to save money by refinancing even if your
current rate is not a full 2-points higher than the market
rate. If you are creative and mathematical, you might be able
to work out a worthwhile benefit with a lot less margin. However,
it is always recommended to consult your financial advisor.
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