Mortgage Refinancing 101: How to Get Started Refinancing Your Home Loan

Many homeowners had a negative experience purchasing their homes and avoid the thought of mortgage refinancing all together. Mortgage refinancing has the potential to save you a lot of money, if done correctly. Here are several tips to help you decide if mortgage refinancing is right for you and get on the right path to saving money with the new loan.

Mortgage Refinancing 101: Is Refinancing Right for You?

There are a number of reasons for mortgage refinancing, regardless of the interest rate you qualify for. Even if you cannot qualify for a lower interest rate, mortgage refinancing still makes sense if you need a lower payment amount or want to borrow against your home equity. Mortgage interest rates have been rising in recent years; however, they are still at historically low levels. If your financial situation has changed since purchasing your home, you may have a better paying job, have married, divorced, or saved some money; because your financial picture is different now you may qualify for a better mortgage interest rate.

Even if you cannot qualify for a lower interest rate you can still lower your payment amount by extending the term length of your loan. Term length is the amount of time you have to repay the loan; the term length you choose and the interest rate you receive determines your monthly payment amount. You may also consider refinancing to consolidate you debts and rebuild your credit. Debt consolidation with your mortgage has the added advantage of deducting the interest you pay from your Federal Income tax.

Mortgage Refinancing 101: Avoid Overpaying for Your New Mortgage

Once you've decided mortgage refinancing is right for you it is important to do your homework and research mortgage offers. By doing your homework you will be able to avoid costly mistakes with your mortgage loan. The Internet is an excellent tool for mortgage refinancing; you can quickly locate and compare offers from dozens of lenders with a simple online search. When you compare mortgage refinancing offers it is important to compare all fees, terms, and the interest rate. Many homeowners think choosing the loan with the lowest interest rate means they are getting the best deal. These homeowners often overpay for the rest of their loans by neglecting to consider lender fees, retail markup, and closing costs.

You can learn more about mortgage refinancing, including costly mistakes to avoid by registering for a free mortgage guidebook.

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