When should you decide to refinance your home mortgage loan? This is a difficult and important decision facing you and your home finances. After historically low interest rates mortgage rates are trending upwards.
Refinancing home mortgage loans is all about timing. At present there are 850,000 homes are now a positive equity situation after taking a hit in the mortgage crisis, so the time may be now for many
Depending upon the amount of time you’ve lived in your home, and the amount of time you plan on staying there, you might want to consider a mortgage refinance if you are less than pleased with your current home mortgage.
Generally, home owners should consider a refinance home mortgage when:
* You are planning on living in your same house for a significant amount of time (at least three years) and
* from refinancing your interest rate will drop at least 2%.
These qualifications are based on the costs associated with refinancing. Changing your home mortgage loans over to new terms means the same fees and payments of your additional loan.
The costs of refinancing can be as low as zero and as much as 6% of your loan amount, and depending on the costs you will receive a different new rate.
Recent options for refinancing your home mortgage loans are low-cost and no-cost refinance loans. These loans eliminate the initial costs associated with transferring your hone loan from one program to another, meaning you will pay nothing and immediately see better rates.
But as with every benefit there is an associate drawback, and in the case of zero-cost refinancing the drawback is higher rates than you might get if you paid the initial costs.
Your higher rates are a means for the lender to make their money on the transfer regardless of the ‘zero-fee’ label, their fee simply comes over a longer period of time.
Other refinancing options include zero or low fees at the outset but with the fees built into the interest rate. Both options come to the same result; although you pay no or low initial fees for refinancing your home loans, you end up paying for it in the guise of higher interest rates.
In order to secure the absolute lowest interest rates when you refinance your mortgage you will usually pay transfer fees, points, and other associate charges that will cost up to 6% of your total loan amount. T
his may seem like a lot of up front cash – you already went through this for your initial mortgage loans, but refinancing your home mortgage loans might be the single most important financial decision you will ever make.
Today’s rates are lower than ever, in some cases 4% or 5% less that when you took your initial home mortgage. The savings you will see when you refinance will take some time to generate, but once there will be more than substantial and a positive advancement for your home investment.
Keeping aware of current mortgage rates and potential market trends will show you the best time for a mortgage refinance.
The golden rule of any investment is buy low, sell high, but with a mortgage refinance you can buy low, then buy again even lower, and always sell higher than when you bought.
That’s why real estate is such a potent investment, and why refinancing your home loans must remain a consideration.