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How To Make Informed Decisions
There are quite a few people out there looking to get into the market for refinancing mortgages. While refinancing can be a great thing, it's really important to consider if you're making the right decision for your long-term financial health. The tips below can help you make an informed choice about whether or not this is something that should be pursued by your family.
The first step in exploring your options with regards to refinancing is to speak with at least three different lenders regarding interest rates and closing costs that they will charge you. This will give you a good idea of what kind of deals are currently being offered on the market so that you have some concrete numbers to work with.
Interest Rates & Closing Costs
Follow the refinancing steps below to maximize your chances of getting a better deal on your mortgage or to qualify for one you never thought possible. Follow the tips in this article, and be sure to check out our list of the top mortgage lenders in your area.
The first thing you need to do is call up each of the companies offering interest rates and closing costs on potential refinance mortgages and ask them several questions:
1. How many lenders will I have competing for my business?
2. Will there be any fees for this service?
3. What types of offers can I expect to receive from you
4. How quickly will you get back to me with the information?
Mortgage Refinance Benefits
Before making a final decision on whether or not refinancing makes sense for your situation, be sure that you shop around one more time. Call up at least three lenders that did not give you quotes before asking them for rates and closing costs. This should give you a good idea of what kind of low-cost options exist out there.
One great benefit to refinancing your mortgage is that by taking advantage of lower interest rates, it's possible to reduce your monthly payments, which in turn helps take pressure off other areas of your budget such as groceries and gas money.
Things To Keep In Mind Before You Refinance
Make sure that you find out whether or not you will be required to pay for 'points' when refinancing your mortgage. This is essentially a cash price that the lender asks of the borrower in order to set up their loan.
How Points Can Save You Money, Time & Hassle
Points are normally one percent of the total value of your home but can often be financed into your new mortgage if you do not have the extra cash. If you are only refinancing an amount equal to 80% or less of what your home is worth, adding points may significantly lower your interest rate and result in cost savings for you over the life of your loan.
How To Get The Right Deal
By taking a balanced look at your financial situation, you can make an informed decision regarding whether or not going back to school for a degree is a good idea, taking on extra credit card debt, or if refinancing is right for you. Just remember that by making sure your budget will allow you to meet all of your existing obligations while staying within your new payment range from the completed refinance, it's possible to stay financially healthy without putting yourself in jeopardy.
Now that you have some idea of what refinancing can do for you, it's time to go out there and really get things moving. Just remember that by doing a bit of homework on your own first, taking into consideration any tax breaks or existing financial obligations, it is possible to make an informed decision regarding whether or not refinancing makes sense for your situation.