How To Refinance Your Mortgage
Refinance a home mortgage
There are times when you may need to refinance a home mortgage. If you need to access home equity that's locked into your mortgage and you don't want to take out a second mortgage or home equity loan, then refinancing may be an option. You may also want to get out from the terms and conditions of your existing mortgage, if interest rates have fallen or you're locked into a variable rate mortgage and interest rates are rising. Both of these scenarios can cost you thousands of dollars if you stick with your existing mortgage, and you should think about refinancing if either of them arise. As a general rule, a variable rate mortgage is better when rates are falling, and a fixed rate is a superior option when they are on the rise.
How to Refinance Your Home
If you're wondering how to refinance your mortgage, here's what you need to know:
- Shop around not only with banks and mortgage brokers, but also with alternative lenders such as those you'll find on the Internet.
- Carefully compare not only interest rates, but also terms and conditions associated with the mortgage. If you have questions about these, ask and be sure you get clear and complete answers to your questions. Request written information that spells out the terms and conditions of the mortgage.
- Find out if there are any penalties associated with refinancing your current mortgage. Factor these into the equation carefully to be sure you're still getting a better deal in the long run.
- Tell your current mortgage lender about the improved offer you've received. They may be willing to match the terms and conditions to prevent losing your business.
Depending on the situation, the advantages of refinancing may include lower interest rates, reduced monthly payment amounts and more advantageous terms. Some mortgage brokers penalize you for making additional payments or paying off the mortgage early, so if you've come into some money and you want to speed up your home ownership process, refinancing a home mortgage with a different lender under more favorable terms can be a smart decision.