Refinance News on Current Refinance Rates

Learn More About What It Means to Refinance

Whenever mortgage interest rates go up or down, its inevitable that the term refinance comes up in conversation. But what does it mean to refinance a mortgage, and is a mortgage refinance right for you? Often, refinancing your mortgage can result in a less expensive loan, but thats not always the case.

What Does Refinance Mean?

In terms of a mortgage, refinancing means replacing your current loan with a different one. Your new mortgage can be with the same or a different lender   the point for a mortgage refinance is to change one or several of the terms of your loan.

There are a few reasons why a homeowner might want to refinance, including:

• -Obtain a lower mortgage interest rate
• -Change the term length of the loan
• -Switch from an adjustable rate mortgage (ARM) to a fixed rate loan

More often that not, however, a homeowner refinances their home loan in order to take advantage of lower mortgage rates.

New Home Loan Versus Current Refinance Rates

Generally, interest rates available for both first-time home loans and refinancing are about the same. The reason a homeowner would be interested in any one of todays current refinance rates is because he or she obtained a home loan in the past, when interest rates in general were higher, and would like to reduce the cost of that loan by switching to a lower interest rate available today.

However, its not always cost-effective for a borrower to refinance, even if refinance mortgage rates are lower than the original rate on the current loan. Thats why its important for anyone considering a mortgage refinance to weight all the costs of changing their loan, and not just the interest rate alone.

Should I Refinance?

Because a mortgage refinance essentially entails going through the home financing process all over again, the decision to refinance shouldnt be taken lightly. First all of the paperwork, income verification, credit check and other tedious and time-consuming processes must be followed when changing loans.

Additionally, the closing costs you pay when you originally buy a house licensing, taxes and other fees must also be paid when refinancing. That means in addition to the mortgage rate, you must also examine the total fees and consider whether the savings in interest would make up for this additional cost. Sometimes the fees charged by a lender are so high that they cancel out the reduction in interest paid other times, though, the fees are very reasonable and refinancing is a smart decision.

Remember, refinancing a mortgage is a big undertaking, but has the potential to save you thousands of dollars on your mortgage with current refinance rates. Just be sure to thoroughly examine the terms of a refinancing offer before committing to ensure you really are saving money.