In general, if
there is a 2% decrease in interest rates, you should consider refinancing.
This figure is generally accepted as a threshold when comparing the costs
of refinancing a mortgage and the savings of a lower rate. There are other factors you should take into consideration, for example,
how long you plan on living in the same residence. Some other
considerations are listed below:
Who Should
Consider Mortgage Refinancing?
-
If you
have an adjustable rate mortgage and rates are rising
-
If your
current mortgage rate is higher than the prevailing rate.
-
If you
have an adjustable rate and want to lock in so you don't have to
worry about rising interest rates.
-
If you
wish to improve your cash flow.
-
If you
want to build up equity more quickly by converting to a shorter term
loan.
-
Those
who plan on living in their home for several years.
Who Shouldn't
Consider Mortgage Refinancing:
-
If
you have higher interest rate debt such as credit cards and
other personal loans. Generally, the rates on these types of
debt run higher than mortgage rates.
-
If you plan on moving in
the near future.
-
If interest rates are
higher than your current mortgage
-
If you're close to
paying off your mortgage.
In many ways, your house is like a
gold mine. If you have discipline and knowledge of the benefits of refinancing, you can tap into its
bounty for years to come.
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Consultation
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Debt Consolidation - Loans & Credit Card Bill - Debt Consolidation
Last
Updated:
Monday, March 24, 2008
