The article concerns the following question – Refinance Mortgage Rates: What should be your goal? When it comes time to refinance your mortgage, there are many alternatives, and a sea of options. Using the interest rate as the sole factor in determining the right lender to choose or the type of mortgage to sign is a mistake. Even though it appears the rate is the same, all mortgages are different. Consequently, writing down your goals, and understanding what you expect to achieve from a mortgage refinance will help you to decide which mortgage rate to choose.
Refinance mortgage rates may include fixed or variable rates, rates tied into discount points, rates associated with credit score, rates corresponding to the number of years of amortization, and rates depending on type of lender. Private lenders tend to be a little costlier than financial institutes, and typically, hard money lenders are the most expensive.
To begin your quest to choose the right refinance mortgage rates, you first need to explicitly list your goals. Then you need to actually calculate the costs and end result to determine which type of mortgage and which lender is best for your situation. Here are some of the questions you should ask when developing your goals. These questions will also help you determine whether you should refinance your mortgage, or not.
- Do you want to decrease your interest and save money by finding a cheaper rate and leaving your payments high?
- Do you want to decrease your interest payments and lower your payments so that you can use the monthly differential for something else?
- Do you want to own your home sooner? Are willing to make the sacrifice to decrease the term and make higher payments?
- Are you only interested in getting a refinance because your situation is so tight that you need relief? Basically you are agreeing to take whatever help comes you way regardless of rates.
- Similarly, if you had a bankruptcy or your credit history is poor, you might be content to take any mortgage rate in order to show good faith and rebuild your credit score and record.
Once you decide your ultimate end result, then you need to comparison shop in order to find the mortgage rate that best suits your requirements when doing your home loan refinancing. If you want to save money, and both the interest rates and loan processing fees are high, then you probably cannot achieve your goal. You need to find a lender that is interested in your top notch credit history and who is willing to negotiate on the fees.
Lastly, when you do compare the lenders’ options, do not be fooled by advertisements and slogans saying that they are the fastest, the best, and the cheapest. The only way to know whether the mortgage and the lender are right for you is by setting up a spreadsheet calculating the total costs, and by applying those numbers to your end goals.