Some homeowners jump too quickly at the opportunity to lower their mortgage payments, but is there a way to make the most out of refinancing.?
The monthly mortgage payment is the most expensive thing that many homeowners make. Refinancing allows homeowners to reduce their payments, and while it can be done responsibly if planned accordingly, some homeowners jump blindly. Wanting to save money is usually the main reason most people want to refinance, but some experts believe this process is not only outdated, it is far too simplistic. A more realistic complex model shows that waiting for bigger savings will save you much more money in the long run. Here are a few tips on how you can save the most money on your mortgage.
Turn down free money. By now you should know that nothing is truly free. You need to evaluate a few things first. You have to compare the reduction in monthly payments against the costs associated with refinancing. Only when the difference is substantial should you refinance.
Weigh the pros and cons. You need tread carefully on when to pull the refinancing trigger. Consider the mortgage application fees, title insurance premiums, and other closing costs. For example, if you have the ability to save $25 now, you lose the opportunity of saving $50 or even $100 if interest rates continue to fall. The optimal time to refinance is when the rates have fallen 1 to two percent from your existing mortgage.
Look before you jump. This analysis serves as a conduit to remind you that many financial decisions are more complicated than they seem. Saving is important, but pouncing to soon can lead to ultimate losses.
Make sure that your refinancing gives you the best savings. Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you!