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Home Refinance Guide
Are you thinking about refinancing your home loan? Many people are considering the interest rates are currently very low. During the 1980s, interest rates were as high as 18%! Today, you can find rates MUCH lower, making this an ideal time to make a change. If you are thinking about refinancing, you should be aware of several things to ensure you make the best choices.

First, make sure the company you plan to work with has a solid reputation. Unfortunately, what can happen from time to time is that a new company will surface, offering a great package to refinance your home. However, since the company is new, they do not have the required experience to back their “deal.” With no history or reputation, you are taking a chance, which could get you into a lot of trouble.

Second, you should ask many questions and if you do not understand something, make sure it is explained so you do before you agree to or sign anything. You will probably be told the current rate, which is great, but working with a lender on refinancing goes well beyond that. The best thing you can do is educate yourself as much as possible so you know the right type of questions to ask. For example, did you know that a mortgage loan that has a 15-day lock period is lower than one over 60 days?

If you are considering locking your loan in prior to applying for a loan, if you were working with a good lender, this may not be a bad idea. The problem is that no one knows what the market is going to do. Therefore, while your lender might advise you that an increase is coming, he or she may not be able to tell you when. That means you may lock into an 8% loan, only to find that two days before your loan approval, the interest drops to 7.5%. If you know and trust your lender, then you might consider it but otherwise, you might want to consider letting the interest rate float until the time of closing.

For your own refinancing, just remember that all of the costs will quickly add up. That means your application fees, points, appraisal, attorney feels, loan origination fee, credit report, inspection, private mortgage insurance (PMI), other home insurance, title insurance, survey, recording, underwriting, and so on, will be one huge number when it is all done. For this reason, you need to know exactly what costs will be associated with the refinance so you can plan accordingly. After all, typically refinancing includes new closing costs, which many people do not realize.

Locate a qualified lender in your area, one that can work closely with you in determine the best time and the best options for you in refinancing your home. Again, the time is good but you still need to be wise with your choices to make sure the refinance will be beneficial and not a detriment.

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