By refinancing your mortgage at a lower rate you could save a bundle of money over time. Simply put, you can most likely refinance your original mortgage with a new mortgage that has better rates and terms and save a lot of money. If interest rates have dropped since you last financed your home, a new refinance loan could save you 10 - 15 or even 20 thousand dollars or more in mortgage payments.
It costs you nothing to explore your options. In order to determine whether refinancing will save you money, you need only to weigh the costs of taking out a new loan against the savings you gain in reduced monthly mortgage payments.
Here's the strategy: Comparison shopping. When looking at your options, compare several new loan offers to find the lender with the lowest interest rates, closing costs, and processing fees. That way you can get the lowest overall costs on a new refinance loan.
Here are 5 important questions you can ask loan officers, to determine the true costs of a refinance loan.
1. Are you being charged points?
2. Can you get your low rate locked-in?
3. What is the length of the loan you're being quoted?
4. Will I be charged a penalty for prepayment?
5. What are the lenders closing fees?
With the information you get on interest rates, points being charged, length of loan, prepayment penalties, and closing costs you can then determine whether a mortgage refinance is in your best interest. Most lenders have quite a bit of flexibility in the area of rates, fees and closing costs. So, if you like to bargain, this is your chance to make a deal that could save you a pile of money. You have the aces, all you have to do is play them!
