With mortgage rates temporarily low for awhile longer, homeowners are rushing to refinance. But before you lock in at a lower rate, here’s a checklist to make sure you’re saving money and getting the best loan for your needs.
1. First of all, use a refinance calculator to make sure you are saving money. Calculate your break-even point to see if you’re still saving after the closing costs. Check out What Everybody Ought to Know About Refinance Calculators for more tips on how you can save from refinancing.
2. Check the caps before refinancing into an ARM. Bankrate has a great article about caps and floors before you refinance.
3. Evaluate various loan types, including ARMs to see if they are right for your situation. For more information on ARMs, check out Should You Refinance Into an ARM?
4. Shop around for mortgage rates.
5. Check your score before refinancing, and look for ways to improve your credit score to get a better rate.
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