Mortgage Refinancing
In order to make intelligent choices about refinancing
your mortgage, it is important to become an informed consumer.
This page will provide basic information that should prove very
useful when considering refinancing your home loan or mortage. Although
it cannot provide every answer to every question is will give you
the basic groundwork so that you can make educated decisions.
Should you refinance your mortgage?
There are a number of situation wherein refinancing your mortgage
can be quite beneficial. These situations include:
- if you purchased your home at a time of higher interest rates
and are now considering refinancing at lower rates. Something to
note is that you should only refinance at this time if you will
retain the home long enough to recover the refinancing costs.
- if your current mortage is an adjustable-rate mortgage (ARM) and
you would prefer to have a set monthly payment schedule so that
you can better plan your finances.
- if you would like to convert to a mortgage that offers other features
that your current mortgage does not provide.
- if you want to increase the rate that you build equity in your
home by increasing your payments and thus reducing the length of
time of the mortgage and the interest that you will pay on the loan.
- if you wish to remove some of the equity that you have invested
in your home for a downpayment on another property or for another
large value purchase or investment.
Mortgage refinancing costs
There are a number of fees or costs that you will most likely incur
during the refinancing of your mortgage. These fees may or may not
include:
an application fee - this is a charge levied by
the lender that covers the initial cost of all the paperwork and
processing required to initiate your mortgage refinancing application.
This will often include things like checking your credit history.
title search fee - the lender must do a title search
in order to determine that you are the rightful owner of the property
and that there are no unknown leans against the real estate.
title insurance fee - this is the cost of the policy
that protects the lender in case of discrepancies in the properties
title.
appraisal fee - this covers the cost of having
an appraiser determine the fair market value of the property that
the refinancing is being done on.
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