Should I Refinance My Home? A Quick Quiz to Help You Answer This Question

For some people, the ability to refinance your home may shrink monthly expenses and actually better credit all at one time. Contrary to what you might consider, refinancing is still a viable option for many homeowners. Decide if it's a effective idea to refinance your home with this fast quiz: Should I refinance my home??/p>

1. Are the current mortgage interest rates at least 1 point less than your present mortgage interest? If so, refinancing your home mortgage might make sense. If interest rates are lower now by 2 points or more than when you purchased your home, you should emphatically look into refinancing.

2. Do you currently have an adjustable rate mortgage, negative amortization or interest only loan that is due to readjust or which isn't building equity? If so, today's historically low mortgage interest rates make it a wonderful time to refinance a home loan and lock in low rates on a standard mortgage refinance loan with a fixed interest rate.

3. Do you have at least 20 percent or more equity in your home? If so, you might profit from refinancing by reducing or eliminating the Private Mortgage Insurance (PMI) that you are paying every month. PMI is a type of insurance policy that is necessary in many loans where the purchaser didn't make a down payment of 20% or more. In exchange for less money down, PMI provides additional insurance to lenders in the event of a default. But if you now owe 80% or less on your mortgage, you may be able to drop the PMI and that can reduce monthly payments by $50 to $200 or more.

4. Is your debt to income ratio nearing the maximum? If you refinance your place, you may actually improve your credit score by freeing up additional income and lowering the minimum monthly payment amounts of your basic bills. By keeping a good credit score and low debt to income ratio, you will often qualify for lower interest rates on everything from credit cards to insurance, making this a sound crucial move toward lowering all of your bills at one time.

5. Do you require to pay for a large one-time out of pocket expense like major medical bills or college tuition? If so, it is oftentimes more affordable to take out money when you refinance your house rather than securing additional loans. Simply keep in mind, you could be refinancing for up to 30 years so the total cost may be substantially more in the long run. Take time to calculate the cost versus savings for yourself before making a final determination.

If you answered "yes" to any of the above questions then you might benefit from speaking to a mortgage broker or lender to refinance your home. It could easily save hundreds of dollars per month.

Louis Vela is a mortgage consultant in the New Lenox, Illinois area. Louis helps individuals and families to qualify to own a home of their own. In addition revealing critical mortgage insider information needed to help consumers research the necessary information before they refinance their home.

Please make sure to grab a copy of the Free Mortgage Report below. Six Insider Secrets Banks Don't

Mortgage Expert Louis Vela