1. Wave those fees
One consideration you need to make when
thinking about mortgage refinance is that a
small rate cut can bring you a fast pay off.
Many mortgage companies today are waiving
refinance fees for things like application,
appraisal, and legal fees. The savings can
add up to between $1,500 to $3,000. However,
be careful of how much you will save in the
outset and balance it by how much more you
will pay overall. Sometimes companies will
not give you the lowest mortgage refinance
rate when they waive your fees.
2. Points Options
You may also want to consider paying points
if you are planning to stay in your home for
more than three years. A point equals one
percent of the amount of the loan. If you
pay points and closing costs, you will most
likely get the lowest rate available.
3. Adding Points
Another option with mortgage refinance is to
add the points and closing costs to your
refinanced mortgage. You may only want to
consider this option if you have had your
mortgage for over three years, because then
you have already lowered your mortgage by
quite a few thousand dollars. This way you
may add on the extra fees with points and
closing costs, but your overall mortgage
will still be smaller than before. With a
new rate and a smaller total loan amount,
your mortgage refinance will reap you a
smaller payment each month.
Money Saving Tip #3: Pay
Additional Points
A good way to save money on your monthly
payments, even when you refinance your
mortgage, is to pay extra points. If you pay
extra points you can possibly get a lower
rate on refinancing your Arizona home. This
may work well especially if you have
borderline credit. The lower interest rate
will also save you money in the long term.
4. Good Rule of Thumb
As a rule of thumb, you should only consider
mortgage refinance if your new mortgage will
be at least 2 percentage points below your
current rate. The exception to this general
rule is when you are able to get a mortgage
refinance that waives fees. With these low
cost, or in come cases no cost, refinance
program, it may be worth it to refinance
with just a little smaller lowering of
interest rates.
In the end, your total cost for mortgage refinance will be dependent on your interest rate, points, and other costs. Therefore, it is important that you shop around to find out which mortgage refinance program will work best for you. Do your research into each company to make sure that they are financially sound and provide good customer service, too. Then take advantage of the mortgage refinance programs to save you money each month on your mortgage payment.
Save serious money on you Refinance loan. Use the free quote box to the right and let us do the heavy lifting for you. No obligation, just savings!
