When Should I Refinance My Home Mortgage?

In today’s economy money is tight, taxes are high, and food is expensive. In a time where serving sizes are shrinking as the cost of living rises, it’s easy to fall into the trap of believing there aren’t any ‘good deals’ ready for the taking. The trick to seeing through this facade is to think inside the box – your home. You’ve almost certainly heard from your friends, family, and colleagues boasting about their newly refinanced home mortgage saving them hundreds of dollars each month. Home mortgage refinancing has started to make a lot of sense for home owners the last couple of years. 2013 is a great time to seriously consider refinancing your home.

The first step to planning a refinancing of your home is to determine what exactly you’re trying to accomplish. It’s important to remember that refinancing your mortgage does not pay off your debt; it simply restructures it under different terms. Most home owners seek a lower interest rate, allowing them to save up to hundreds of dollars each month. You can also restructure your mortgage to a shorter term if achieving a mortgage-free life faster is a personal goal of yours. Write your reasons for refinancing your home mortgage down on a piece of paper in front of you and continue on to the next paragraph.

Now that you’ve set your goal, let’s go through 3 more quick qualifying questions that will determine if you’re ready to refinance today, or if you need more time to prepare before refinancing your home.

1. Get a refinancing rate at least one percent lower than your current home mortgage interest rate. The top value for home owners is achieved with a one percent or higher drop in interest rate.

2. Make sure you’re in it for the long run. Refinancing your home mortgage doesn’t make sense if you’re planning on moving in the near future.

3. Ensure your credit reports are accurate. Keeping accurate credit records streamlines the entire mortgaging process. Inaccuracy involves many headaches that are easily avoided by simple credit checks beforehand.  Even if you’re credit isn’t as good as it was several years ago, there’s no reason you can’t refinance your mortgage with bad credit.

Don’t miss your opportunity to refinance because you were waiting for the ‘best deal’. You’re almost done reading this article. Don’t waste your time researching more about “when should I refinance my home mortgage” if all that’s keeping you from lowering your interest rate is procrastination. Mortgage rates fluctuate on a daily basis, and are expected to gradually rise later this year. Waiting around for the best rates may just leave you with your current rate. Knowledge is power, but reading about refinancing won’t lower your rates.

The time is right for home owners to refinance their home mortgage. Rates are at record lows creating tremendous opportunity for you to save money, or pay off your mortgage faster. Does refinancing my home mortgage make sense? This is the question you need to ask yourself. Now that you’ve set your refinancing goal and completed the refinancing checklist, you’re prepared to make that decision.