| Should I refinance my mortgage today or not ? This is | | | | in turn lower your credit score. If you still want to make |
| the big question these days. With the current | | | | applications, then it is best to do them all in the same |
| mortgage rates fluctuating the way they have over | | | | month, that way your credit score will only be affected |
| the past few months, many homeowners have been | | | | during a one month period as opposed to being |
| toying with this question. | | | | affected over several months, which will hurt your |
| However it seems that the lowest interest rates we | | | | score even more. |
| have seen in many years have started to climb again. | | | | Another thing to consider is how long you plan on living |
| Just a few months ago we were seeing interest rates | | | | in your home. Refinancing a mortgage can be quite |
| as low as 4.25 % however with the given | | | | costly. There are penalties to breaking your current |
| unemployment rate rising, the confidence in mortgage | | | | mortgage agreement, closing costs and other fees |
| backed securities has declined somewhat, resulting in | | | | involved that can seriously eat into your potential gains. |
| pushing up mortgage interest rates again. | | | | So if you plan on moving in the next seven years then |
| So the question remains " Should I refinance my | | | | it may not be in your best interest to refinance. |
| mortgage or not?" | | | | Banks know that statistically most homeowners live in |
| If you have missed the best opportunities to refinance | | | | their home of an average of 7 years only, therefore |
| when interest rates were in the 4.5 %-4.75 % ranges | | | | they make sure to charge most of the interest up |
| because you were holding out in favor of possibly | | | | front in the first few years of the mortgage as to |
| getting an even lower rate, you might be regretting the | | | | make the most profit possible. Also , in order to get the |
| decision and wondering to your self if you should go | | | | most out of a refinance, it would be best if it were |
| ahead and move quickly before the rates rise even | | | | possible to reduce the rates by at least 2 points, again |
| more. Or you may be still holding out in hope that the | | | | this is due to the fees and costs involved with |
| rates will drop again. This is a tough decision to make, | | | | refinancing. |
| because the markets are difficult to predict. The main | | | | One last thing, if after all consideration is done and you |
| question is, can you still drop your rates by at least 2 | | | | decide to move forward with a home refinance, make |
| points? If the answer is yes then there is still a window | | | | sure that you deal with a broker and not a broker |
| of opportunity to take advantage of. | | | | bank. What's the difference between the two ? Well a |
| There are some important factors that must be | | | | broker bank is essentially a regular bank disguised as a |
| seriously considered before making applications to | | | | broker firm. |
| mortgage broker companies. Gone are the days when | | | | Now why would that be a problem ? |
| someone could just walk into a bank or mortgage | | | | All banks in the US are exempt from RESPA laws |
| broker and secure a loan with a 650 credit rating. This | | | | which govern the actions of broker firms in regards to |
| is not to say that it would be impossible to get a | | | | ethical practice. This means that a bank can mark up |
| mortgage loan with a 625-650 rating, however, with | | | | the rates without having to explain their actions. This |
| the rates on the rise it may be difficult to secure an | | | | can entail a .25% increase on what an applicant is |
| interest rate at under 5.5 % - 5.75%. | | | | already qualified for, which can total into thousands of |
| One of the reasons is that lenders have become | | | | dollars of extra interest payments over the course of |
| much more stringent when it comes to applicant's | | | | the loan term. |
| credit ratings and other factors that would determine a | | | | A broker firm on the other hand, is held accountable |
| persons ability to make payments. In order to get the | | | | for its actions and is required to remain transparent in |
| best rates of say, 5.21 % which is currently the lowest | | | | all financial dealings with its customers. This is why you |
| rates available at the time of this writing, an applicant | | | | would rather use a mortgage broker firm instead of a |
| will need to have a credit rating of 750 or more to | | | | bank. |
| secure the best interest rates. | | | | Hopefully this will give a little bit of an insight in regards |
| Remember if you are going to be making applications | | | | to choosing to refinance your mortgage or not at this |
| with lenders, they will perform a credit check which will | | | | time. |