Mortgage interest rates are at record low and you must be planning to refinance your mortgage to take advantage of the low rates. With a good credit score and stable financial situation, you can definitely go ahead and refinance your properties. But again, you should also have a clear idea about the worth of the property. If you do not have equity in the property, lenders won’t refinance your property.

5 Things to keep in mind before you refinance:

• Interest rates: You should refinance your property if it helps you in saving your money. Check out the interest rate on your current loan and compare it with the rate that you would receive after refinancing. This will give you an idea whether you would be saving money or not.

• Refinance Underwater Mortgage: If your mortgage is underwater (i.e. if the worth of the property is lower than the mortgage that you owe), try to assess how far underwater it is. With the introduction of the Home Affordable Refinance program, you may be able to refinance if your loan is not more than the 105% value of the property.

(more…)

Mortgage rates are down and long-term mortgage rates are at the lowest level compared to that of the past 4 years. Even short term rates may go down soon. So it is the best time to refinance your mortgage to get a lower interest rate.

However, it actually depends upon the borrowers’ equity that they have, credit score, present loan terms etc. They will have to think whether they can benefit from the refinance even after paying pre-payment penalty and closing costs.

Borrowers having loan amount more than $417,000, will not extract much benefit as interest rates on jumbo loans are still hovering around 6.5 percent. But no doubt rates are down to a great extent. So, if a borrower has only taken the mortgage 2 or 3 years ago with a higher interest rate, they can think of refinancing their mortgages and converting them to 30 year fixed loans with a lower rate.