You want to save more money on your mortgage payment but you need to know how do you refinance a home first. Owning a home can be a glorious thing. Being able to personalize it and turn it into something that you have always dreamed about. It can also be a huge hardship and financially stressing if you don’t have a good interest rate or a low mortgage payment. I am sure that if you are a homeowner, you have felt both sides of this coin more than once.
We are proud homeowners of almost four years now, but I won’t lie to you, it has been extremely challenging to live on a single income so that I could stay at home with our four kids. It has been worth every sacrifice and every struggle. I wouldn’t trade the opportunity to be home and raise my kids and be a homemaker for anything. On that same note, we are always looking for ways we can lower our monthly bills, and especially looking for a lower mortgage payment.
It was at this point we asked “How do you refinance a home?” We were able to see how much we could save on our monthly mortgage payment, with a free mortgage calculator and found a lender that would lower our payment by almost $200 with a minimal closing fee.
How do you refinance a home?
Check your current interest rates here, but before you go to far, there are three important questions to ask before you refinance your home:
- What kind of loan is it?
- Steer clear of ARMS (adjustable rate mortgages). You have a great interest rate for the first few years and then it goes way up – and so does your payment! The best way to go is fixed. Then you are guaranteed your same payment for the entire term of your loan.
- What are the closing costs?
- In order for you to be able to justify the cost of refinancing, you need to be able to determine if you are going to live in the home long enough to make it worth the up front cost. Lender fees will vary with each lender, so there will be a difference
- Is there a prepayment penalty?
- If you are able to make extra payments each month, or if there is a possibility of paying it off early, you don’t want to be charged any penalties or fees. Make sure there are no prepayment penalties or fees on your loan.
Just remember that there are several banks, credit unions, and mortgage companies that want your business. Don’t settle for the first one you talk to, look around and get quotes from different places to compare closing costs.
How do you refinance a home?
Let us know your tips and ideas and experiences. I would love to hear them.
Topic: How do you refinance a home
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