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How to Refinance Your Home
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Tags: Refinancing, Refinancing Your Home, Home Refinancing, Personal Finaces
Refinancing your home can be a good money saving tool. This is how you can refinance your home.
| 1. | Find current interest rates in most major Sunday newspapers or contact a mortgage broker. |
| 2. | Identify the type of mortgage you want–—fixed, adjustable or a combination of the two be sure and do research to choose which would be best for you. |
| 3. | Compare the new interest rates to that of your current mortgage. If the rate is not lower it may not be the best idea for you. |
| 4. | Use the amount you owe on the loan to calculate what the new monthly payment would be by using a financial calculator or an online mortgage calculator. You'll need to know the new loan amount (current loan amount plus closing costs, such as points, title and escrow fees–—unless you plan to pay for them out of pocket–—the new interest rate, and the number of months of the new loan). |
| 5. | Subtract your current monthly mortgage payment from the new monthly mortgage payment; this is your monthly savings. Yay, you have to love saving that cash...maybe you should start save the extra for retirement. |
| 6. | Divide the monthly savings into the total cost of the loan (including points, title and escrow fees). This is the number of months it will take to recoup your investment. |
| 7. | Determine whether you plan to live in your home longer than it will take to recoup your investment. If so, refinancing is probably a good idea. |
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