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There are many reasons why you might want to consider
re-financing your existing mortgage. You may want to get
a lower interest rate, lower your monthly payments, or
free yourself from an impending balloon payment. Whatever
the reason, make sure you understand what is involved
in a refinance.
There are certain steps that you should take to avoid
paying too much. If you are thinking about refinancing
your existing home loan, you should check the interest
rates on your mortgage and see if refinancing your mortgage
will save additional funds.
A good time to refinance is a difficult thing to determine.
Some say that it is safe to refinance if the current interest
rate on your home equity loan is at least 2 percentage
points higher than the prevailing market rate. This amount
is usually a safe margin when trying to balance the costs
of refinancing a mortgage against the savings.
It is possible to save money by refinancing even if your
current rate is not a full 2-points higher than the market
rate. If you are creative and mathematical, you might
be able to work out a worthwhile benefit with a lot less
margin. However, it is always recommended to consult your
financial advisor.
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