Refinancing Your Home
Refinancing your home loan can help you save money in the long run or reduce your monthly mortgage payments. Here, we've revealed our top three mortgage refinancing options that can help you capitalize on today's low interest rates! Your goal from refinancing your home loan may be to reduce your monthly mortgage payments or possibly take years off the length of your home loan repayment. Or, perhaps you'd like to refinance your mortgage as a means to cash out some of your home's equity. Our top-rated options are Bank of America, Wells Fargo Home Mortgage and Chase Mortgage, and each has a reputation for providing comprehensive refinancing plans with great customer service and fewer hidden fees. Read our article about what to look for when refinancing your home loan, and also check out our top-rated refinancing options.
Before choosing a refinancing lender, check to see if you are you eligible for a better interest rate. You can save money if your credit score has risen greatly or if the interest rates on mortgages have gone down in recent years. Alternatively, you can refinance into a shorter length mortgage to save you money over the long term. If your financial situation has stabilized or improved in recent years and you can afford higher initial monthly payments then it can be in your interest to shorten the length of your mortgage. By paying just a little more every month, you end up paying less interest overall on your initial capital investment and save an a large amount of money.
which, as of this writing, offered low interest rates of 4 percent for fixed mortgages and 2.875 for adjustable-rate mortgages. Bank of America allows people to file much of their paperwork online in order to expedite the underwriting process. Next on our list is Chase, which offered 4 percent refinancing loans on fixed mortgages and 3.5 percent on adjustable-rate plans. Then there's Wells Fargo Home Mortgage, which also offered 4 percent on fixed mortgages and 3.25 on adjustable mortgages. These figures were for 30-year mortgages, and people who refinance to shorter mortgage durations can often get even lower rates.
Do you have an adjustable rate mortgage or a fixed rate mortgage? An adjustable rate mortgage means that when the interest rates go up, your mortgage interest rates follow suite. Getting a fixed rate mortgage while interest rates are low will keep you paying the smaller interest rates. Beware of any mortgage that calls for balloon payments of any kind. These are plans that keep initial payments low and then suddenly increases them. This is what put so many home owners into foreclosure, an place no one wants to be.
It is not a good idea to refinance your mortgage if it is largely paid off. The later years of a mortgage are generally spent paying off the principal while earlier years are spent paying off interest. This means that if you are more than half way done with your mortgage, you may stand to lose money by refinancing into a new plan simply because it'll add more years of paying interest. Consider how much interest you have left to pay in your current mortgage and how much you will have to pay if you refinance, even if you can get a better interest rate. Most mortgages carry a prepayment penalty in the fine print so carefully consider what it is going to cost you as opposed to just how much you'd be saving. At times, the prepayment penalty is high enough that you end up losing money by refinancing into a better home mortgage. Generally, the earlier you pay the prepayment penalty in the loan, the more likely you are to get a better deal by refinancing.