Secret you need to know before getting your mortgage refinanced

Once it’s that period to think about your mortgage refinance options, there are issues that must be considered so as to make the right decision? It's not a guess work you must consider some important points before you take a refinance.Begin by knowing your current mortgage interest rate. You can come across this listed on your mortgage documents or your lender should be able to inform you. If you maintain a flexible rate mortgage, you won’t have a set interest rate, but that’s also an essential piece of information.

Subsequently, enquire the rate you will be offered if you get your mortgage refinanced. Note this– don’t simply take a glance at the interest rates offered and just assume you going to get those rates.You must know if it applies to your own situation. Lock a lender into a particular rate prior to you start the process. Many lenders advertise a very low rate, but you may discover you don't qualify for that rate. Be very cautious if you’re being asked for any fees up front.



Compare the rate of your current mortgage with that you are about to be offeredoffered, but also consider the terms of the mortgage. For example, if you have a flexible rate loan, you may find the benefits of having a fixed rate mortgage are enough to warrant a mortgage refinance, even if the rates you’re paying aren’t that much different from what you’re being offered.



Majority of financial people suggest that you save atleast one and a half full points on your interest rate before you consider a mortgage refinance. Why? You’re likely going to be paying closing costs, appraisal fees and other costs embedded with the refinance mortgage. If you’re not saving atleast one and a half full points, it will take you a couple of years to save the amount of fund you’re spending on the closing. Again, this doesn’t apply if you’re getting significantly better terms that in themselves warrant following through with a new finance.



As a last point, consider unrealized plans. Are you expecting to move in the next few years? Are you looking for a change in job status that could create the need to change your location? Is your family growing and in need of more space? If you aren’t going to stay in your current house atleast two extra years, a mortgage refinance probably isn’t a good option because of the time it takes to recover the cost of the closing.