Many real estate experts agree - the average interest on a home mortgage can end up costing you nearly twice the price of the mortgage itself. Just remember that the best deals are usually reserved for homeowners planning to stay in their home for several years.
While finding the best interest rate out there remains a priority, make sure to look at several other factors. These three steps to finding the best mortgage rates could help you lock in a better deal.
A better approach: Figure out how much the new rate can save you each month and compare that to the costs involved with the refinance. If you can save $250 every month with a lower interest rate but it costs you $6,000 to refinance your loan, it will take you two years to save an amount equal to the money you had to pay up front. So do the math; math is your friend.
A word of caution: Just be sure you can afford the extra money each month that a shorter term will cost - there's no use saving money in the long run if it breaks your budget right now.
On the 15-year loan from the earlier example, changing the interest rate by just 0.5% will save you more than $5,000 over the life of the loan. Each point on that $100,000 you borrowed will cost you an additional $1,000.
In the end, it pays to shop around for the mortgage deal that fits your needs and your budget. Shopping online with a free service like RateMarketplace.com can save you time and money as reputable lenders compete for your business. Refinance and start saving money before your next mortgage payment is due!
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