Loan Mortgage Rate Refinance

With loan interest rates at such low levels today, many people want to get away from their previous higher interest rate mortgages by getting those loans refinanced at these lower rates. This can be advantageous under certain conditions.

When refinancing an existing mortgage, look into all the fine print to discover what hidden fees or penalties might be applied. Too high fees could make a particular refinancing offer not good. If the new loan is at a variable rate and the old one is at a fixed rate, it could be a problem if the federal prime rate rises very much before your new loan is repaid. Rising federal rates can make payments skyrocket and become difficult to pay. Adjustable rate mortgages (ARMs) are variable and go up or down as the prime rate moves. With rates so low today, there is just about only one way to go in the future, and that will be up.

If you can refinance at a fixed interest rate and it is substantially lower than your current rate, from 1% to 2% lower, then making the switch can be in your best interest and save you money in the long run. Monthly payments can go down by hundreds of dollars in some cases. Another way to reduce monthly payments when you get a loan mortgage rate refinance is to have a longer term at lower interest. This will drop monthly payments dramatically. If money is not an issue, go the other way and shorten your mortgage term. Payments will only be a little higher at lower interest rates, but you can cut the term drastically and save thousands of dollars.

To get low refinance mortgage loan rates, you need to have excellent credit, stable employment, equity in the home and no adverse financial hits from bankruptcy or liens. Credit unions are able to offer excellent loan rates and they are a great place to begin your search. When you are looking to find a low refinance mortgage loan rate, be sure that no one is allowed to run your credit report until you have selected one to work with for sure. Inquiries for loans will lower your credit score and that can cost you the best interest rates available.

Ask your current lender if they can do the refinance or get you a better deal on the one you have, based on updated information. To find other offers, do some online research into low refinance rates. You should discover that refinance rates are running in the range between 4.5% and 8.5%. This is only a little higher than the lowest rates for first mortgages.

ARM loans have lower rates but higher fees; they may cause a problem if there is a balloon payment due in several years. If you have a balloon payment due and rates are then high, you may not be able to make the payment or refinance again and the house could be in jeopardy. Be wise, do research, and find the best fixed rate, if possible.