Considering Mortgage Refinance Program

If you are thinking about a mortgage refinance, you should consider a lot of mortgage refinance programs types. For example, you might want to look into a 15-year fixed rate mortgage refinance. In this plan your mortgage payments are a bit higher than a longerterm loan, but you pay substantially less interest over the life of your loan and build equity more quickly. This also means you have less interest to deduct on your income tax return, of course.

You can also consider mortgage refinance if you have an adjustable rate mortgage with high or unlimited interest rate increases. You can switch to a fixed rate mortgage or to an adjustable rate mortgage that limits changes in the rates at each adjustment date aswell as over the life of the loan. If you would like to apply for a mortgage refinance loan with a particular company, and if you do not want to let the interest rate float until closing get a written statement to guarantee the interest rate and the amount of discount points that you will pay when closing. This binding commitment ensures that the mortgage company won't raise these costs even if rates increase. You can also require an agreement where the interest rate can be decreased but not increased before closing. If you can't get the mortgage company to put this agreement in writing you should choose one that will provide this information.

Most companies place a limiton the length of time they will guarantee the interest rate, 60 days mostly. You must sign the loan during that period of time or you can lose the benefit of that rate. Also there may be a delay in processing the papers because of many people refinancing their mortgages when rates decline. That's why you should contact the company periodically to check the progress of your loan approval and to see if additional information is required.

Mortgage Refinance Costs

When refinancing your mortgage you usually pay off your original mortgage and sign a new loan then. With this new mortgage refinance loan you pay most of the same costs you paid again to get your original mortgage. It can include settlement costs on discount points and other mortgage refinance fees. You can also be charged a prepayment penalty for paying off your original loan early, although some states prohibit this. The expense for a mortgage refinance depends on the interest rate amount of points and other mortgage refinance costs nedded to obtain the loan. Most mortgage companies will charge several points and the total cost can run between three and six percent ofthe total amount. Some companies may offer zero points at a higher interest rate which may significantly reduce your initial costs.