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Home Home and Family Home Refinance Home Loan
Refinance Home Loan PDF Print E-mail
Written by Ray Lam   
If you are in the market for a home mortgage refinance loan, there are several things you need to know to avoid overpaying. Careful comparison shopping will help you avoid 90% of the mistakes homeowners make when refinancing their mortgage loans. Here are several tips to help get you started with a home mortgage refinance loan.
by RayLam


If you are in the market for a home mortgage refinance loan, there are several things you need to know to avoid overpaying. Careful comparison shopping will help you avoid 90% of the mistakes homeowners make when refinancing their mortgage loans. Here are several tips to help get you started with a home mortgage refinance loan.

Mortgage refinancing can save you thousands of dollars when done correctly. When comparison shopping for a home mortgage refinance loan, it is important to compare lender fees, closing costs, and interest rates using the Good Faith Estimate. Many financial advisors tell you to pick a mortgage based on the Annual Percentage Rate; however, the APR does not give you enough information to make an informed decision.

Adjustable rate mortgages usually come with a low introductory interest rate; however, this interest rate is not fixed. Your lender will periodically adjust the interest rate and your payment amounts to the financial index your loan is tied to. This rate adjustment usually occurs annually; however, the exact timeframe for adjustments can be found in your loan contract. Adjustable Rate Mortgages are best suited for homeowners that know what they are getting into and have a high tolerance for financial risk.

The 2007 limit for traditional mortgage loans, also called the "conforming loan limit" is $417,000. If your home mortgage refinance loan needs to be greater than this you will need a jumbo mortgage loan. Because these loans come from non-traditional mortgage lenders you can expect to pay a higher interest rate for the financing. If you currently have a jumbo loan and owe less than $417,000, you should refinance as soon as possible as you will qualify for traditional financing.

Adjustable Rate Mortgages typically come with lower interest rates than fixed interest rate loans and mortgages with shorter term lengths come with lower rates than longer mortgage loans. Not every type of home mortgage refinance loan is right for every financial situation. Choose the wrong type of loan and you could overpay thousands of dollars and possibly even lose your home.

About Author:

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