Is Refinancing Your Mortgage The Right Thing For You?

Since mortgage rates have decreased and have been hitting record lows lately, many people are considering refinancing their mortgages. This can be a very beneficial thing to do if you have all of the proper information.
 
For starters, you should always read through your current mortgage to find out if you will have to pay penalties for getting out of that loan early. Another useful piece of information to know, if you are contemplating a refinance, is it generally makes the most sense to refinance when you can lower your interest rate by two points. For example, going from 8 percent on a thirty-year fixed loan to 6 percent on a thirty-year fixed loan.
 
The other most important consideration is how long will it take for you to recover the refinance fees in monthly savings on your “new” loan. You can
calculate this by dividing the total costs of the refinance by your monthly savings. This number represents how many months you will need to live in the home to cover the costs of the refinance.
 
Finally, if your refinance is successful and you have lower monthly payments, it might be best to use that money to save, maybe for a rainy day, towards a retirement plan or for a child’s’ college costs.
 
For more information on refinancing your loan go to “http://finance.yahoo.com/how-to-guide/loans/12821“