January 26, 2010

5 Things to Check Before Refinancing

Since mortgage rates have remained low, homeowners have been rushing to refinance. But before you lock in at a lower rate, here’s a checklist to make sure you’re saving money and getting the best loan for your needs.

1. Use a refinance calculator to make sure you are saving money. Calculate your break-even point to see if you’re still saving after the closing costs.
2. Check the caps before refinancing into an ARM. Bankrate has a great article about caps and floors before you refinance.
3. Evaluate various loan types, including ARMs to see if they are right for your situation.
4. Shop around for mortgage rates.
5. Check your score before refinancing, and look for ways to improve your credit score to get a better rate.

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Tags: ARMs, closing costs, mortgage rates, refinance, refinancing, save money

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