When to Refinance


Knowing when to refinance your home is difficult if you are trying to time the market.  Most homeowners try and play the interest rate game like the stock market when it comes to refinancing. They usually think that if they wait a little longer that the mortgage refinance rates will fall.

Unfortunately like the stock market, predicting the trend for interest rates is difficult and if you wait too long it can come back to haunt you. Millions of homeowners waited a day, week or month too long and never saw mortgage refinancing rate decline to the level they had hoped for.

If you are wondering when to refinance a mortgage, take a picture of your financial situation and compare your interest rate with the current refinance rates.

  • Will refinancing save you money without adding years to your mortgage?
  • What will mortgage refinancing cost you?
  • Do you qualify?
  • Can you document your income with W2’s and paystubs?
  • What is your credit score?
  • Do you have enough equity to meet the loan to value requirements for home refinancing?

Many people choose to refinance when they can lower their interest rate by a percentage point.  If you have a jumbo mortgage, lowering your rate a quarter of a percentage point could save you thousands of dollars. So use a mortgage calculator online and do the math so you can make a sound decision on a mortgage refinance loan. You need to have a good idea about how much money you would save by refinancing. We also recommend looking at the big picture when shopping for the best loan.  Remember that a FHA refinance will have a monthly insurance payment in addition to the mortgage payment, so make sure that you are looking at the big picture. Consider the costs and benefits of mortgage refinancing, before paying for a new appraisal and committing yourself to one lender.

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