Weighing the Options of Refinancing

It has been said that only if your new interest is at least 2 points lower, should you refinance your mortgage. That may have been true awhile back, but refinancing now costs a lot less than in the past.  It is never the wrong time to consider a new mortgage!  A refinance is often worth its cost several times over due, in part, to lower interest rates and shorter terms.

Advantages

When you refinance, you might be able to lower the interest rate and mortgage payment amount, perhaps much more than you might think.  You also might have the option of using some of your home's equity by "cashing out" some funds to fix up your home, consolidate debt, or take your family on a vacation.  With reduced interest rates, you might also get the chance to build your home equity faster by changing to a shorter-term loan.

Expenses and Fees

As you probably know, you will have some fees and expenses during the process of refinancing. You will have to pay the same sort of expenses and fees as you did with your current mortgage. These can include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and so on.