Home Mortgage Loan Refinance – Refinancing A Fixed Rate Mortgage

Refinancing a fixed rate mortgage is usually only suggested when

interest rates fall, but you can also save money by changing

your loan terms. You can also pull out part of your equity to

pay bills or renovate.

Lower Interest Rates

In general when interest rates are at least 1% lower than your

current mortgage rate, it pays to refinance. But you need to

consider other factors, such as the length of your mortgage,

loan costs, and how long you plan to stay in your home.

An adjustable rate mortgage (ARM) should also be considered if

you plan to move soon. With rates lower than a fixed, you will

see lower monthly payments. But you have the risk that your

rates and payments will increase over time.

To help decide if refinancing makes sense for you, calculate the

difference in interest payments over the course of your loan.

Online mortgage calculators can help you find both total

interest costs and monthly payments.

Better Loan Terms

Besides lower interest rates, you can save money by converting

to a better loan term. A shorter loan, such as a 15 year term,

can save you thousands on interest payments, even if you don't

have a lower interest rate. However, your monthly payments will

be 10% to 15% higher.

You can also reduce your monthly payments by refinancing for a

longer term. You trade lower payments for higher interest costs.

Access Your Equity

Whether you want to pay off credit cards or pay for your child's

education, you can pull out your equity by refinancing. One of

the advantages of using your equity is that your interest is tax

deductible.

However, if you just want to tap into your equity, a better

option is a home equity loan. You can pull out your equity,

write off your interest on your taxes, and avoid loan fees.

Online Lenders

Online financing companies allow you to research terms and fees

from your home. You can receive quotes within minutes online, so

you can compare finance packages. You can also apply online and

qualify for discounts on closing cost with some lenders.

About the author:

See my recommended Home

Mortgage Refinance Lenders for the lowest rates online.

Carrie Reeder is the owner of ABC Loan Guide, which offers help

finding low rate home

mortgage loans.

Written by: Carrie Reeder