Making Sense of Home Mortgage Refinances

Tapping equity isn't the only reason to refinance; sometimes it can make financial sense to refinance a home mortgage just to get a lower rate.

Whether it's smart to refinance solely for a rate benefit depends on how long a home owner plans to stay in the home. Almost every new mortgage costs money, and it's those fees that smart borrowers want to recoup during the term of home ownership. Otherwise, if you're not getting any of that money back -- through a lower payment and a lower interest rate -- you may as well run out into the street during rush hour and throw stacks of money into the air.

But how do you compare rates to know if you're getting a good deal on a refinance? The best way is to compare Good Faith Estimates and work with a reputable lender who will guarantee its fees to refinance. Not all lenders will stand behind Good Faith Estimates and there are no laws at present that require it, which means the estimate borrowers receive might not mean diddlysquat . . . read more about refinances.

More Articles by Elizabeth Weintraub, click below:

• Recognizing Predatory Lenders
  
• Stopping Trigger Leads When Refinancing
  
• Why Your Mortgage Broker Doesn't Represent You

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_{At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.}