Refinancing is a good option that can help you to get rid of high interest debts. But you can only benefit from it if you can secure a lower rate on your loan and also make minimum payments to the lender. You can try shopping for some of the best rates and costs while you are into refinancing. Besides, an awareness of the entire loan process also helps you get through the deal easily. This article contains an overview of the [url=http://www.mortgagefit.com/refinance.html]refinance[/url] process in simple steps so that it will be easier for you to interpret what the process is all about.
[b:9e138cf1bf]Steps to follow:[/b:9e138cf1bf]
- Decide how long you are going to stay in the property.
- Contact your first lender and find out what he has to offer. Otherwise start shopping with other lenders.
- Get pre-qualified for the loan
- Decide upon the type of mortgage
- Check out the factors that may influence the interest rate on your loan. These are:
- Your credit score.
- Loan amount.
- Number of points paid.
- Compare the interest rate on offer with that of your existing loan.
- Get pre-approved with a lender.
- Calculate the monthly loan payments
- Subtract new payments from current monthly payments. The difference gives you the savings that you can earn by getting a low rate.
- Divide the monthly savings by the total closing costs. That gives you the number of months within which you can recover the closing costs. This time period is known as the Break-even period.
- Compare the months obtained with the time period you're staying in the house. If it exceeds the time period, then refinancing may be a good choice.
- Follow the simple steps that will take you to loan closing, that is, towards finalizing the deal.
- At closing time you'll have to sign the loan documents and the mortgage note. Besides, you will have to pay for the closing costs and prepayment penalty.
[list:9e138cf1bf][*:9e138cf1bf]Which Refinancing Option suits your situation?[/list:u:9e138cf1bf]