Low Rate Refinance

Refinancing is switching the current mortgage of your house with another mortgage lender with a different rate and duration and you want a low rate. A lot of homeowners who have a higher mortgage rate refinance in order to decrease their current mortgage payment or to pay off a debt with the money taken from the new mortgage. Some homeowners also refinance if they have an adjustable mortgage rate and they want to switch to a fixed rate type of mortgage, so that they will have a fixed payment for the entire length of the loan.

There are important things to remember if you are planning to refinance your home.

-- Even though you aim to have a lower interest rate and a lower monthly payment, you could add years to your loan. Say for example you have a 15 year loan of a specified amount at 7% and you have already made a payment of 7 years. Now you want to refinance at a much lower rate say 5.5% for 15 years. Your monthly payment will obviously be lowered but you will be adding another 7 years to the life of your loan.

To compute the remaining cost of your old loan, multiply your current monthly payment with the number of months till the loan is paid off.

Now do the same with the new loan, that is, loan payment multiply with loan duration in months. Add also the closing cost of the new loan.

You will notice that it will cost you more money to pay off the new loan.

--Points that you had paid during refinancing cannot be deducted from your tax immediately. It will be spread out over the length of you mortgage.

If you really want to refinance your home to take advantage of the low interest rate you can. If you do, just increase your monthly payment preferably

the same amount that you had been paying originally in your old mortgage . That way you will save more of your money.

To get the best refinancing rate, shop around. Visit several website to get the best rate possible. Remember how you were able to lock in your rate when you were still buying your house? The lender' s lock in game, remember that? Do the same. If you think the rates are going down just hold off for awhile but if you think the rate is going up, lock in with the lender. Hopefully you get the lowest refinance rate.