Rates are considerably low right now, so if you are paying more than you would like for your mortgage, you may want to consider refinancing. Refinancing is great because it allows you to lower your monthly mortgage rates, which can sometimes translate into hundreds of dollars of savings per month. Here are 5 tips for refinancing your mortgage:
Do Your Research.
Before you refinance your mortgage, you will need to do some research on the new and low rates you could refinance to. You should also do some research on lenders to decide whether or not you want to refinance with your current lender or a new lender.
Do a Cost-Benefit Analysis.
While your refinance could save you money in the long run, you need to assess whether or not it’s worth it for you when taking other costs into account. You will need to pay closing costs since you’re essentially closing on a new mortgage.
Low rates don’t last forever. If there is a low rate you want, act quickly and lock it in as soon as you can. Once you lock in the rates, send your documents as quickly as possible so you can start the process.
Ask questions! If you want to know the exact day your new loan will close, talk to your lender. The more you’re kept in-the-know about the loan process, the less room there will be for mistakes.
Don’t Extend Your Mortgage.
When you refinance, try not to extend your mortgage because you’ll end up paying a lot more money over the long run. If you can, refinance to a lower rate in a shorter-length so you can see more savings.