How To Prepare For Refinancing Your Home

April 20, 2020 Mortgage Refinance,Mortgages

MoneyTips

According to the Federal Reserve Board, there are three things to consider when determining whether refinancing your home is a good idea:

  1. How long you have already been paying your mortgage.
  2. How long you plan to remain in your home.
  3. Whether or not your current mortgage has a prepayment penalty.

When you have had your mortgage for a long time, more of your monthly payments go to paying off your principal. If you refinance, you will be restarting the amortization process, which means that your payments will mostly go towards paying interest and you won’t be building much equity in your home. If you move out shortly after you refinance, the savings on your monthly mortgage payments may not be in force long enough to recoup the cost of refinancing. If your mortgage has a prepayment penalty, find out how much it is. Hi…

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