Many people want to refinance their mortgage so that they can lock into a lower interest rate, but this isn’t always the right decision. There are many factors that a person should consider before making the commitment to refinance. If you have already refinanced your home before, then you should carefully consider your options before doing so a second or subsequent time. It could actually be seen as a negative thing to refinance again and again, leaving a trail of closing costs.
One of the most important things to consider before refinancing your home is your goal. What are your financial goals? Your home ownership goals? You should try your best to have a clear vision and direction so that you don’t end up making a decision that appears to be positive, but actually harms you in the long run.
A majority of people choose to refinance because they want to reduce their interest expenses. In the same vein, some homeowners who locked into a 15-year fixed may want to refinance to a 30-year. The goal of this would be to reduce monthly payments. Other homeowners want to consolidate their first mortgage with their home equity loan. By combining the two into one fixed payment is convenient and even cost-effective for many homeowners.
Most financial advisors will encourage homeowners to only refinance once on a home. There can be a temptation to refinance multiple times in an attempt to chase the most recent low rates, but this can actually do more harm than good. Before locking into a rate and then finding out that you could have waited and locked into a lower rate, do your research. Utilize tools like the ones that are provided on Best Mortgage Rates, Inc. By using our service, you can search and compare mortgage rates from hundreds of lenders!