Hello Bill, I am new home owner who financed my home with national citi mortgae at the interest rate of 6.75% for my first mortgage and 9.00and for my second. I will startng to make my payments from this month(11/01/2007). Is it a good idea to refinance my mortage as interest rates have come down rapidly from Oct'07. Please advise. Thanks
Before you can determine whether or not a refinance is a viable option for you, you need to determine how much refinancing you home will cost. Refinancing your mortgage can be a very expensive process, as closing costs, appraisal fees, broker fees, penalties, etc., can quickly add up to well over $10,000, or even more. The question of how much your refinance will cost is very difficult to answer, as I do not know if any pre-payment penalties will be charged by your current lender due to your early refinance or what closing costs will be charged by your new lender. First, you need to contact your current lender to find out if any early refinance penalties will be charged, and when you can refinance without penalty. You should then contact several different mortgage lenders to discuss the loan terms they can offer you based on your current financial situation.
Once you have determined what the refinance will cost in terms of penalty charges and fees, and what new loan terms are available to you, you can weigh the two options against one another to determine if the terms offered on the new loan will save you enough money to outweigh the cost of refinancing your current mortgage. If you find that you will save more money by moving forward with a refinance now, then by all means, I encourage you to do so. However, if the costs outweigh the savings on your new loan, then you may want to wait until your penalty period has expired before you move forward with a refinance or until you are able to refinance at a lower interest rate.
To learn more about refinance loans, I encourage you to visit the Bills.com Home Refinance Resources page at http://www.bills.com/home-refinance/. If you enter your contact information in the Bills.com Savings Center at the top of the page, we can have several pre-screened lenders contact you to discuss the refinance options available to you. These lenders should be able to tell you the loan terms available to you based on your current financial situation, and tell you if a refinance loan can help save you money over your current loan. It is important that you find out the details of any penalty clause of your current loan as soon as possible so you can discuss the implications of a refinance loan with possible lenders.
I wish you the best of luck in obtaining a refinance loan that will save you money over your current home loan, and I hope that the information I have provided helps you Find. Learn. Save.