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Personal Finance

Are You Ready to Refinance Your Home?

House Real Estate 02


Deciding to refinance your home is a big and often beneficial decision. But is it the right choice for you? You'll know that you're ready to hit the closing table again after you:

Make the correct comparison. When checking out refi rates, be sure to compare the annual percentage rate, or APR, of each loan instead of the quoted interest rate. You must examine the true cost of your loan and compare it to your existing APR to determine whether or not you will save at least a half a point on your new loan.

Get an appraisal. Fannie Mae and Freddie Mac are cracking down -- borrowers with a high loan-to-value ratio can expect to pay extra fees. Therefore, it's smart to get your home appraised performed beforehand so you don't waste time and energy applying for a refi on a property that's worth less than you had anticipated.

Choose the right loan. When looking for a new loan, but be sure to weigh all of your options and choose a product that's right for you. If, for instance, you want to refinance but believe that your job is in jeopardy, you may choose to reduce your payments, even if it means extending the life of your loan.

Shop around. Buyers typically compare loan offers from multiple lenders. But many don't realize that they can actually shop around for title services, too. This can translate into hundreds or even thousands of dollars in savings on your loan. Experts recommend checking at least three lenders and three title companies before making your decision.

Decide to stay put. Selling your home right after a refi is practically a surefire way to lose money. Therefore, you should plan on staying in your house for a while after you refinance. It's a good idea to decide how long you plan to remain in your home and then run the numbers to determine your break-even point -- the point at which your savings outweigh your refinancing costs -- before jumping into a refi.

Stay on top of your credit. A credit rating below 660 can derail your mortgage refinance. Steps to improve and maintain your credit score include paying your bills on time, keeping all of your credit lines open and paying down any cards that are at their max.

Bank Rates

Loan Type Graph Rate +/- Last Week
30 Y Fixed Graph 3.92% -- 3.92%  
15 Y Fixed Graph 2.99% up 2.98%  
30 Y Fixed Jumbo Graph 4.31% up 4.24%  
5/1 ARM Graph 3.26% up 3.12%  
5/1 Jumbo ARM Graph 3.84% dw 3.85%  
Loan Type Graph Rate +/- Last Week
$30K HELOC Graph 4.68% up 4.62%  
$50K HELOC Graph 4.10% up 4.04%  
$30K Loan Graph 4.47% dw 4.48%  
$50K Loan Graph 4.12% up 4.11%  
$75K Loan Graph 4.12% up 4.11%  
Loan Type Graph Rate +/- Last Week
36 M New Graph 2.99% dw 3.23%  
36 M Used Graph 3.18% dw 3.33%  
48 M New Graph 3.22% dw 3.32%  
48 M Used Graph 2.72% dw 2.90%  
60 M New Graph 3.33% up 3.31%  
Loan Type Graph Yield +/- Last Week
6 month Graph 0.35% up 0.34%  
1 yr Graph 0.62% -- 0.62%  
5 yr Graph 1.41% up 1.39%