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If you are hoping to minimize your monthly payments, or pay your loan off more quickly, then refinancing may be right for you if you are able to attain your goal. If interest rates are low enough, or your credit has improved enough that you can qualify for a much lower interest rate, then your payments will probably be able to be lowered. To make it worth the cost of refinancing, you must be able to attain an interest rate lower than at least around 2%.
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If you have enough equity in your home, or you have paid off a large enough chunk of your loan, you may be able to lower your payments enough even without attaining a lower interest rate. If you need a large amount of cash fast, you could also refinance to exchange the equity in your house for cash. If you have less than around 10% in equity, however, it may not be worth it to refinance since you may be stuck with additional heavy fees and charges for not having sufficient equity.
However, if you do have enough equity, and/or you have paid off a large chunk of the loan, if you have two mortgages it would probably be wise to combine those two mortgages into one since the interest rate on the second mortgage will be much higher. That higher interest rate can therefore be eliminated by combining the two mortgages together.
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It is always very important when thinking about refinancing to check to be sure that you do not have any outstanding balances (required payments that have not been paid), or fees that have not been paid. Be sure to be up-to-date on all your payments, and be sure all charges and any fees you may have are also paid before you refinance because if you do not, it will most likely show up when you try to refinance.
It is also very important to check your credit score to ensure that you have good credit. Anything around 678-720 (the average credit score) is considered good credit. The better your credit, the lower of an interest rate you will be able to get. So not only is it ideal to refinance when the interest rate in the housing market is low, but it is also ideal to improve your credit as much as time will allow you before you refinance.
Start on a mortgage-refinance today!
Related posts:
- Refinance Mortgage: Reasons For Refinancing
- Mortgage Refinance
- Refinance-Mortgage: With Bad Credit
- Mortgage Refinance: Let?s Break Down The Basics
- Contemplating A Mortgage Refinance? Read On
Source: http://www.rai-chertkoff.com/2012/02/26/mortgage-refinance-is-it-right-for-you/
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