How to Know when to Refinance Your Mortgage

When you are considering a mortgage refinance, there are many options to consider. You are looking for the best rate and you want to save money. However, if you refinance at the wrong time, it could end up costing you more money in the long run. Choosing the proper time to refinance is essential. Here is how you can tell when to refinance your mortgage.

You Have Equity

The first thing that you need to assess is your current mortgage situation. Typically, you will need to pay on your mortgage for several years before you have enough equity built up to refinance. Otherwise, you will not get enough cash to make a difference. Also, you may not even qualify without a certain amount of equity as the bank has lending ratios that it has to meet.

Lower Interest

Another thing that will signal the time to refinance is the interest rate in the market. You will periodically receive offers from lenders in the mail that advertise their interest rates and offers. If one of the advertisements that you get appears to be substantially lower than what you are paying, it might be worth looking into. In order to save money on your monthly payments and avoid paying more than you should, make sure that the new interest rate is lower than your existing one.

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