Even if you refinanced before, you may find that it's time to refinance again. Rates are again at all time lows, and many people who refinanced as early as last year are thinking about refinancing again. Many people are finding out that it might be smart to refinance, but go for a shorter term loan in order to pay off their home faster. By refinancing your existing 30 year loan into a 15 year loan, you will not only pay off your loan in half the time, you could save tens of thousands of dollars in interest payments. Keep in mind that refinancing into a shorter term loan will probably increase your monthly payments.
Figure out what refinancing your home is really going to cost. Find out what you will have to pay in closing costs. For example, if your closing costs are $2,000 and you will save $100 per month on your mortgage payment, it will take you 20 months to recoup your closing costs. If you are planning on staying in your home for more than 20 months, then it makes sense to refinance your home. The longer you stay in your home, the more savings you will see. For example, even if you stayed in your home for just 3 years, or 36 months, your saving would be $1,600. If you stayed 5 years, or 60 months, you would save $4,800.
Remember, the loan with the lowest closing costs might not actually give you the best savings. If you save $400 on the closing costs, but pay an extra 1/4 percent interest over the life of the loan, you will be paying substantially more in interest payments over the life of your loan. Make sure you look at both the closing costs and your payments to make sure you are getting the best deal and saving the most money.
Make sure that you get quotes from multiple lenders. Make sure that you are comparing apples to apples, and get each lender to quote you for the type of loan you are looking for, for example a 15 year fixed rate loan, and make sure to get the estimated closing costs and fees. This way you can see which lender is offering you the best deal. There are some great sites that will give you free, no obligation quotes on your next loan. Using one of these sites is a great way to quickly see how much money you could save by refinancing and taking advantage of today's low rates.
Article Source: http://EzineArticles.com/6675912
Figure out what refinancing your home is really going to cost. Find out what you will have to pay in closing costs. For example, if your closing costs are $2,000 and you will save $100 per month on your mortgage payment, it will take you 20 months to recoup your closing costs. If you are planning on staying in your home for more than 20 months, then it makes sense to refinance your home. The longer you stay in your home, the more savings you will see. For example, even if you stayed in your home for just 3 years, or 36 months, your saving would be $1,600. If you stayed 5 years, or 60 months, you would save $4,800.
Remember, the loan with the lowest closing costs might not actually give you the best savings. If you save $400 on the closing costs, but pay an extra 1/4 percent interest over the life of the loan, you will be paying substantially more in interest payments over the life of your loan. Make sure you look at both the closing costs and your payments to make sure you are getting the best deal and saving the most money.
Make sure that you get quotes from multiple lenders. Make sure that you are comparing apples to apples, and get each lender to quote you for the type of loan you are looking for, for example a 15 year fixed rate loan, and make sure to get the estimated closing costs and fees. This way you can see which lender is offering you the best deal. There are some great sites that will give you free, no obligation quotes on your next loan. Using one of these sites is a great way to quickly see how much money you could save by refinancing and taking advantage of today's low rates.
Article Source: http://EzineArticles.com/6675912
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