What is a Mortgage Refinance?
A mortgage refinance is when you renegotiate the terms of your home mortgage. Home loan or mortgage refinance is done to alter your payment schedule, raise or lower payment amounts, change between fixed or floating interest rates, and to achieve a better rate of interest. Many people also choose to refinance a mortgage to borrow against accumulated equity.
When Should I Consider a Mortgage Refinance?
There are several excellent reasons for you to consider undertaking a refinance of your mortgage loan. Changing interest rates is often a catalyst to cause people to consider a refinance of their home mortgage loan. If you take a home loan out when interest rates are high and at a later date they fall then you might find it advisable to refinance. On the other side of the same coin, if you agree on a mortgage that has a variable interest rate and interest rates begin to take a climbing trend then loan refinance can save you money. As time passes and considering the term of most mortgages, it is not unlikely that your personal situation could change. This might cause you to want to renegotiate or refinance to switch to bi-monthly payments, raise, or lower the amount of the payments. So too, if you are considering a large purchase, financing a child’s education, or seeking to pay of high interest debt, home mortgage refinance can be advantageous.
How Do I know if Refinance Rates are worth it?
Most often the best way to determine if a home mortgage loan refinance is worth it is to schedule an appointment with your lending official. They will be able to assess your personal financial situation and let you know if you will be doing yourself a favor through refinance. It is a good rule of thumb to use the 2% rule. Generally speaking, when there is 2% in interest rates to be saved the refinance rates will be recovered.