Shop Around For Refinance

When shopping around the mortgage brokers for a change of lender and home loan contract please do not be mesmerized by the price. By price we mean of course the rate of interest. These are nearly rock bottom at this time and therefore very tempting but there are three other important factors that you must take into account before committing yourself to this major money product.

Know, in detail, your aims with regard to money over the next year, two years and through the next life stage that you are coming to.Could a adjustable rate  mortgage be for you? Because the bank rates are so low, most refinance shoppers want to nail down their repayment with a set interest rate. But remember that while these deals are ‘fixed’ they are not permanent and there will come a time when they will be reviewed and changed, probably upwards.

Ask yourself whether you are likely to sell your property within the timeframe of this review. If your answer is yes or probably then you could reduce your monthly repayments with around .25% less on the interest rate of a variable loan.   If you can answer ‘no I’m staying put for the foreseeable future’ then a second refinance option is something for you to consider. ‘Pay Points’ buy not only a lower rate but also are a tax deduction. The price of pay points is between 1 and 2 percent of your full home loan.The days of one mortgage in a lifetime are long gone.

The wise homeowner is prepared to remortgage when the conditions are ripe for it. With this in mind the third factor to weigh up when refinancing is the penalty payments for early termination. Think about a mortgage that does not have any termination charges. They are available but will attract slightly higher interest rates. Looking past this drawback you will keep more of your capital gain when you come to sell your property or remortgage the next time. Refinancing your major asset is not as simple as just comparing interest rates. Know your own circumstance and future intentions and select the best deal to meet your individual needs.

Tags: Adjustable Mortgages, interest rates, Mortgage Rates, Refinance Mortgage

This entry was posted on Thursday, March 13th, 2008 at 6:00 am and is filed under News, Mortgage Rates, Interest Rates, Refinance Mortgage, Adjustable Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.