A refinance lender can help lower mortgage interest rates to reduce monthly house payments and save thousands in interest charges over the course of the loan. However, refinancing is not for everyone. Factors such as rate differences and the amount of time owning the home are significant considerations. Refinance lenders can help individuals determine whether refinancing is the right choice.
Refinancing an original loan to a lesser rate results in immediate savings in a lower monthly payment and also significant savings in interest fees over the life of the loan. Another option is to finance to a shorter term which may not substantially reduce their monthly payment, but saves thousands in interest charges and can cut the length of the loan in half. An educated and trusted refinance lender will be able to help determine what is best for each situation. Borrowers with adjustable rate mortgages (ARMs) often seek other financing options to afford a guaranteed rate for the life of the loan. Some use refinance lenders to obtain a second loan or home equity loan. Making this kind of decision needs to be done with lots of research and faith. Romans 5:1 says Therefore being justified by faith, we have peace with God through our Lord Jesus Christ. Trusting that God is on our side and blesses efforts toward a more Godly life is definitely a step in the right direction toward confident decision-making.
As a general rule, refinancing a home is worthwhile if rates have fallen 2 points lower than what is currently being paid. However, refinancing a 2-point difference might not be worthwhile for people not staying in a home for long due to the cost associated with a refinance. It typically takes 3 years to recoup the costs of a refinance and then begin saving money on the lower rate. Hold off on using a refinance lender if planning on moving in 3 years or less. Cost can vary widely from one to another. Expect application fees, title fees, origination or point fees, and a variety of other costs.
To compare the costs of refinancing from one refinance lender to another, ask for a good faith estimate. A good faith estimate requires the lender to clearly itemize their fees that incur as part of refinancing. When reading estimates be on the lookout for prepayment penalties that charge extra interest if paying the loan off early or in the event of a sale. Prepayment penalties can be a deterrent to refinancing, so look for refinance lenders that do not include such a penalty in their loans. Be a cautious consumer when comparing refinance lenders so that the lender isn't the only one who benefits from the new loan.
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