Refinancing?
Things to consider before refinancing:
1) The Interest Rate You Are Paying
Consider
the interest rate you are now paying before refinancing. Compare it
against the current interest rate to see how much you would save by
mortgage refinancing. Use our free mortgage calculator to determine
your new monthly payments. (Use our Mortgage Calculator)
2) The Current Interest Rate
Check
the current interest rate. To get the benefits of a lower rate, you may
have to pay fees associated with the loan, unless your lender is doing
a no fee loan. Before committing to a refinance, be sure you have
discussed the fee options with your loan officer. [Get the Current
Mortgage Refinancing Rates]
3) How Long You Will Live In Your Home
The
median length of stay in a home is 8.2 years. However, you may have a
better idea of how long you will be in your home. If you do not plan on
owning your home for much longer, the lower payments associated with
the refinancing may not cover the mortgage refinancing fees. If you
plan on staying in your home for along period of time, refinancing
could be an excellent way to reduce your monthly payments. Also, if you
are planning on moving into a new home while retaining the old home as
a rental property, refinancing is a solid plan. You can lower your
monthly mortgage payment and in turn, increase your rental income.
4) Consolidation
If
you have several outstanding bills, you may want to consider
refinancing your home and in turn, consolidating and paying off your
other debts. If you have equity in your home, you may be able to access
that equity through a "cash out" refinance. You could choose to apply
that equity to a debt consolidation plan, a new car, or home
improvements.