Mortgage Refinancing: When Is The Time To Make A Move?

After hearing news about the Federal Reserve cutting down on rates or after realizing that the rates are significantly lower compared to the time you bought your home, it is really tempting to consider mortgage refinancing. At first look, it really makes sense. After all, who would not want to take advantage of low rates that mean lots of money saved on monthly fees?

However, the fact of the matter is not all homeowners will be able to save by simply taking a new loan just because the rates are low. It is important to know when to refinance your mortgage in order to know if the move is right for you.

In practical terms, you are refinancing only because you want to save. But you don't usually see your savings right away. This is because there are fees involved when taking a new loan and penalties to pay for getting out of the old one. Here are the issues you should consider when deciding if it is the right time to take refinancing:

The amount of time you plan to stay in your home
If 30 of staying in a single house is long enough, extending it for few more years by taking another loan may not be that attractive. So, if you plan to move for the next couple of years or so, then, it is really not a good idea to take another loan. Remember that the only way to recoup the cost you paid for the new loan is by staying in your home for as long as possible. And if you don't have any plan on doing this, let the current low rate pass.

The cost of terminating your current mortgage.
Paying off your mortgage early may carry penalty. This may include a small percentage of your outstanding balance, or several months' worth of interest payments. While this may not be a large, it still adds up to the cost which you need to recoup later on.

The costs of the new mortgage.
The sound of "low rates equal savings" is very attractive, but on paper, it is a totally different story. Taking new mortgage means you have to pay several fees including appraisal, application, insurance and origination fees, as well as legal cost, another insurance, and title search which can all up to thousands of dollar. Securing a lower rate would also mean paying upfront for points. Remember that savings do not come free when refinancing. You have to take the first blows in order to reap the rewards later.

The cost of borrowing
Take note that lower rates doesn't mean you will automatically get lower monthly payments, and thus, savings. Aside from rates, other factors that influence the amount of your mortgage are the length of loan, the type of loan (adjustable or fixed) the amount of points you have to pay upfront, and other fees included in the term. So don't be surprised if you don't get the savings you've first expected.

Savings on tax deduction
Lower rate means lower mortgage interest. And lower mortgage interest means lower tax deduction. So savings after refinancing may not be as large as you think it is.

If you are considering refinancing your mortgage, think of these things and consult your financing and tax advisor over these matters to help you understand if it is really right for you.

By your GoodBuddy Richard La Compte
You may contact me through my Help Desk

***Sorry Comments Are Temporarily Disabled!


Website URL:
Title / Subject:
Hide my email


My Articles

Home Mortgage Refinancing Tips To Get A Loan
Solid Reasons For Refinancing Your Home
Mortgage Refinancing: When Not To Take It
Mortgage Refinancing: It's All About Timing
Signs Of A Good Mortgage Refinance Company
Thinking Of Refinancing? Evaluate Your Current Mortgage First
Mortgage Refinance Saving Tips
Mortgage Refinancing: When Is The Time To Make A Move?
Why Work With Mortgage Refinance Specialist?
Home Mortgage Refinance How To Make It Easy
Bad Credit? You Can Go For Mortgage Refinancing!
Mortgage Refinancing: Getting The Best Rate
The Benefits Of Mortgage Refinance
Four Persons Who Shouldn't Go For Mortgage Refinancing
Mortgage Refinancing The Steps And Insights
Quick Steps To Refinance Your Mortgage
FAQs On Home Mortgage Refinancing
How Get The Go Signal For Mortgage Refinancing
Mortgage Refinancing Factors You Should Know
Home Mortgage Refinancing: The Ups And Downs Of Having A Bad Credit Score
Vital Pieces Of Home Mortgage Refinance Advice
Reasons To Refinance Your Mortgage
Four Questions To Protect You From A Mortgage Refinancing Mistake
Making Home Affordable Plan Is It The Right Choice For Home Mortgage Refinance?


   Related Sites

My Articles

Mortgage Refinancing The Steps And Insights Are you thinking about the mortgage refinancing options that..

FAQs On Home Mortgage Refinancing Are you now feeling the heavy financial burden on your shoulder?..

Home Mortgage Refinancing Tips To Get A Loan Have you gone frustrated over the very expensive monthly payments that you..

Mortgage Refinancing Factors You Should Know Before facing off with a lender, before applying for a mortgage..

Related Products:

Related News:

Stumped about refinancing? This refinance calculator makes it a no-brainer - The Mortgage Reports
Fri, 23 Aug 2019 11:51:55 GMT
    Stumped about refinancing? This refinance calculator makes it a no-brainer  The Mortgage Reports

Is now the time to refinance? One way to anser this question is to use a refinance calculator to see how much you can save.

Refinancing For A Lower Mortgage Rate? It Might Be Harder Than You Think - Forbes
Wed, 21 Aug 2019 18:39:18 GMT
    Refinancing For A Lower Mortgage Rate? It Might Be Harder Than You Think  Forbes

Mortgage refinances are surging thanks to low mortgage rates, which hit nearly three-year lows just last week.

Refinancing now can save 9.7 million borrowers $267 a month. Here's how. - The Mortgage Reports
Tue, 20 Aug 2019 11:50:53 GMT
    Refinancing now can save 9.7 million borrowers $267 a month. Here's how.  The Mortgage Reports

Lower mortgage rates mean refinancing can save 20 million borrowers an average of $276 a month according to the latest research.