Last year many Americans took advantage of low interest rates and refinanced their mortgages. This way saving thousands of dollars over the term of the mortgage loan. Many people wondering if they missed the boat on the refinancing boom. Rates are at near-historically low levels! Therefore it's still a great time to consider locking in today's rates for a 15/20/30 year term. Especially when consumers facing an increase in rates from an adjustable rate mortgage (= ARM).Whether a refinance is right for you depends on several factors. Asking yourself a few questions can help you decide whether it's a good time to contact a mortgage lender.
Some questions are:
How does the interest rate you are paying compare to today's market rates? Many consumers never think about refinancing, even though they may be able to save a nice amount of money every month or shorten time from the length of their mortgage by refinancing.
Do I have any equity? As long as you have equity in your home, you might be able to refinance or go from an adjustable rate mortgage (ARM) to a fixed-rate mortgage.
Is it possible to move to a more attractive ARM? If you have (almost) no equity or you are locked into an ARM that financially doesn't give you much space, you might be able to get some breathing room through a longer term ARM, such as a 5 year ARM (which locks in a rate for five years and automatically adjusts after that).
What are the fees I will have to pay? Refinancing can save you money, but if the savings are not that big, the costs in fees for originating a new mortgage loan may eat up all your savings. Make sure you ask in advance what all the charges, costs, and legal fees will be before you start.
How can I be sure that I am getting the best rates? In order to ensure you're making the best refinancing decision possible, it's good to shop around, by using rate comparison sites like Bankrate.com or Motleyfool.com. One of the easiest ways is to ask for a best-rate guarantee. Some mortgage lenders guarantee that their rate is the lowest in the market at closing date & even agree to pay you a certain amount if they are not the lowest on that particular date.
If I have extra equity, should I take a bigger mortgage loan? If you are comfortable with a little bit larger payment, you can think ahead: do you plan a new kitchen, bath remodel, or extra room in the coming years? You might avoid the cost and hassle of a home equity loan in the coming years, as well as the risk that rates can rise rise, by taking out a little bit larger mortgage loan & using the additional amount to invest in home improvements.
In order to look at the future with confidence, consider financing your loans with lenders that fit your lifestyle and back up their promises. Not all mortgage lenders are the same and the consumer should take a good look at the rate the lender can provide. Also the reputation of that company is very important. There are companies that will provide you with a different attractive perks like a best price guarantee, a fast & easy application process, a speedy loan decision and a guaranteed closing date. But don't forget that you always should evaluate the refinance offer in relation to your personal circumstances!
LendAdvisors.com - Blog that helps you with Real Estate, Mortgages & Refinance.
