More than Just Lowering Mortgage Payments
When it comes to getting a good refinance, everyone has something different to say. This is because a “good deal” depends a lot on what you are looking for. Those who want to access some of the equity built up in their home will likely think that a good deal is different from lowering their monthly payments. In the same way, those who want to own their home as soon as possible will be looking for different things all together. Knowing what you want to get out of your refinance is the first step to getting a good deal.
Once you make the decision about what you are looking for, finding a good deal is much easier. Consider these three aspects when deciding whether an offer is a good deal for you or not.
If you want to own your home as soon as possible, refinancing to the shortest term fiscally possible is crucial. If you are looking to lower payments as much as possible, longer term loans such as 30-year fixed-rate mortgage products work well. Watch out for “deals” that have terms that you do not understand. There are many types of mortgages out there, and uncertainty with your term could leave you very unsatisfied with your mortgage, regardless of the interest rate.
The up-front cash you will need to close on a given loan. Depending on the loan provider, you may not have to pay anything. For those with little cash to spare who are looking simply to lower monthly payments, having a no-cost or low-cost mortgage product is key to getting a good deal.
The Interest Rate
Finally, after all other decisions are made on the best type of mortgage for your situation, interest rates are the last deciding factor.
Just because your monthly payment or interest rate decreases doesn’t mean a refinance is a good deal, though a lot of times it can be a good sign of some savings.