Protect yourself if you need to refinance your home
People explore their choices for a mortgage refinance for many reasons. If you’re in a position where you think one would benefit you, it’s imperative that you think carefully about what option, if any, you’re going to choose.
You need to consider the reason you’re seeking the refinance when you’re trying to decide if an offer is right for you. Think about the length of the refinance term, the interest rate and the monthly payments. One thing that some individuals don’t realize is that you might have to pay more each month if you go with a shorter term; however, your interest rate may be lower. This means that you can pay considerably less than you would over the entire life of the mortgage.
When you’re reviewing the terms, check for the type of interest rate you will pay. A fixed interest rate means that it isn’t going to change over the course of the loan. This may help you to budget better since you’ll know approximately what you’ll need. There is a chance that your payment will vary based on things like insurance, taxes and community fees if you have escrow payments rolled into your mortgage. This can also occur if you have an adjustable rate mortgage.
An adjustable interest rate on your mortgage means that your payments can vary considerably if the interest rate changes. This can be up or down, depending on how circumstances change. If you have this type of mortgage, pay close attention to any limits on caps or changes that might occur.
Once you find the mortgage refinance offer that’s right for your needs, you should have it reviewed to ensure that it meets your needs and that there aren’t any hidden points you need to know about. Your real estate attorney can assist you with this.