No Closing Costs Refinance

By looking into refinancing your current mortgage you could well be getting a much lower mortgage payment by attaining a lower interest rate on your borrowed money. And a fixed rate mortgage gives you the piece of mind that your payment will never change – this is great if the base interest rate goes up. Those with an adjustable interest rate mortgage may wish to reconsider their borrowing position for a safer, less risky option such as the fixed rate.

Should you refinance? Sometimes it is a good idea and other times not such a good idea and it depends on your own circumstances and what the financial targets that you have.

Usually it is a good move to try and get the lowest fixed interest rate that you can possibly get but your situation needs to be evaluated. For those in the first year of the adjustable rate mortgage and it is your aim to move homes within a couple of years or so then it’s probably not a good thing to refinance. But maybe you think the interest rate on your adjustable rate mortgage (ARM) will go up soon then you need to have a long hard think about a longer term fixed rate loan. Particularly if you don’t plan on a house move within the next seven years.

With a cash-out refinance loan the interest that is paid will usually be very similar to what is paid on a mortgage that you don’t take the cash-out. Be aware that there could well be an incremental fee that is linked with a cash-out type refinance loan. This depends on the actual loan you go for and the loan-to-value ratio too.

Consider using the equity in your home to address and pay off the other bills that you may have. Get rid of those high-interest credit cards and store cards or auto loans. In fact, look at your outgoings and identify all of the bills and any debts that have tax-deductible interest. Be sure to get advice from your own tax advisor to ascertain if you can deduct the interest from your new mortgage loan.

Interest rates are hard to predict over the mid to long term but historically, they tend to rise faster than they fall. For those sitting on the fence contemplating whether to refinance or maybe take out new finance for the first time strongly think about locking in the interest rate soon. Of course you can always refinance again in a year or two if circumstances change. Generally the short term interest rate drops will probably not be severe enough to impact on your monthly mortgage payment. If important to consider all options as every situation can be different.

Like buying all products it pays to shop around and gather the information together in order to make an informed choice about your refinancing. Don’t jump into the first “greatest and latest” deal you have come across as it may not be the best mortgage plan for you. There are lots of deals and offers to choose from so take your time to choose wisely.