When To Refinance A Home Loan
Deciding when to refinance your home loan or mortgage is a tricky business. Wait long enough and you may get a good deal. Wait too long and you may not be able to take advantage of good rates. Most mortgage experts agree that such market timing is a mistake many people make when they want to refinance a home loan. You should not look to only the overall market rates when you want to refinance a home loan. So when is a good time to refinance a home loan, you may ask? Here is a quick way to time it all correctly: oRefinance a home loan when you have the time to do all the research and paperwork. You should not aim to refinance a home loan when you are preoccupied with other responsibilities. You need the time to compare lenders, read contracts, consider all your options, and sort through all the paper work. If you are rushed, you are more likely to make a mistake that can cost you. oRefinance a home loan when you grow out of your current mortgage. If your current mortgage is still working for you, refinancing your home loan may simply not be to your advantage - no matter what the rates are doing. oRefinance a home loan when the savings outweigh the costs. When you refinance a home loan, you can save money on interest but you also have to pay fees. You will pay lawyer's fees, penalty fees on your current mortgage, appraisal fees, and other costs as well. If the savings are not substantial and the costs are very high, this may not be the option for you. Use a mortgage calculator or talk to a mortgage expert to determine the costs and benefits of refinancing. oRefinance a home loan when it makes sense tax-wise to do so. If you are considering refinancing, talk to a tax expert to see the ways in which refinancing will affect you at tax time. If you get small savings from a refinance of a home loan but then get hit with higher taxes, you will not be very happy about your decision to refinance your home loan. Sadly, the lower your interest rate, the lower your deduction at tax time, which may mean higher taxes for you. This rule can also cancel out any benefits of a refinance of a home loan, so do be careful. oRefinance a home loan when you find a reputable lender. Do not just rush out and trust any lender to refinance your home loan. Only refinance when you find a lender who is qualified and who will treat you well with good terms and good rates.