Consider Other Mortgage Programs
If you are thinking about refinancing your mortgage, you might want to consider other
types of mortgages. For example, you might want to look into a 15-year, fixed-rate
mortgage. In this plan, your mortgage payments are somewhat higher than a longer-term
loan, but you pay substantially less interest over the life of the loan and build equity
more quickly. (Of course, this also means you have less interest to deduct on your income
tax return.)
You also might want to consider refinancing if you have an adjustable rate mortgage with
high or no limits on interest rate increases. You might want to switch to a fixed-rate
mortgage or to an adjustable rate mortgage that limits changes in the rate at each
adjustment date as well as over the life of the loan.
If you decide to apply for refinancing with a particular mortgage company, and if you do
not want to let the interest rate "float" until closing, get a written statement
to guarantee the interest rate and the number of discount points that you will pay at
closing. This binding commitment or "lock-in" ensures that the mortgage company
will not raise these costs even if rates increase before you settle on the new loan. You
also may consider requesting an agreement where the interest rate can decrease but not
increase before closing. If you cannot get the mortgage company to put this information in
writing, you may wish to choose one that will provide this important information.
Most companies place a limit on the length of time (say, 60 days) they will guarantee the
interest rate. You must sign the loan during that time or lose the benefit of that
particular rate. Because many people refinance their mortgages when rates decline, there
may be a delay in processing the papers. Therefore, you may want to contact the company
periodically to check on the progress of your loan approval and to see if additional
information is needed. |
REFINANCE
Refinance Considerations
Refinance Once, Then Do It Again
Build Home Equity Faster
Get Your Hands on Some Cash
Trade your ARM for Fixed Rates
Mortgage Refinance Costs
Analyze Your Savings
Paying Points For A Lower Rate
Your Personal Income Taxes
Consider Other Mortgage Programs
Deciding To Refinance
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