Three Things to Consider Before Refinancing

If you are thinking about refinancing your home loan, just don't run out and do it without making certain that you will actually benefit. Of course it sounds like a good idea, but refinancing is not a one-size-fits-all option.

1. Check your current rate.
This seems like a like a no-brainer, but it is step that some homeowners skip. Is your rate not that different from what is being offered? Will you really save money by refinancing?

2. Check the fees.
Refinancing is about more than getting a killer rate, there are fees involved. Do the math because when you add up the fees, paltry savings may not be worth the effort it takes to refinance. You might save more money by cutting regular expenses like phone and cable bills.

3. Check your other loans.
Do you already have a home equity loan? You need to see if the holder of that home equity loan will be willing to subordinate to the bank that owns your original home loan. (In other words, can you refinance your mortgage and leave your home equity loan as it is?) In cases where you cannot do this, you may have to pay off that home equity loan before you can refinance.