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Follow These Rules before Refinancing Your Mortgage

tech <h3>Refinancing your mortgage is a smart move if done right.  If done wrong, however, you could lose money when you have to sell.</h3> <h3>      1. Pay Attention to Half Percents</h3> <h3 style="margin-left: 0.25in;">With the current trend of low interest rates, it no longer makes sense to look to refinance when you can save 1%.  In the current market, it makes sense to refinance when you can save a half percent.  However, you shouldn’t refinance more than 3 or 4 times during you loan.</h3> <h3 style="margin-left: 0.25in;">2. Drop Mortgage Insurance</h3> <h3 style="margin-left: 0.25in;">Many loans from the Federal Housing Administration require you to have mortgage insurance for the life of your loan.  Non-governmental loans may require you to have private mortgage insurance until you’ve reached 20% equity in your home.  Refinancing your FHA mortgage into another mortgage can help remove any premium costs. </h3> <h3>      3. Don’t Refinance for a Same-Length Loan</h3> <h3 style="margin-left: 0.25in;">If you have a 30-year mortgage and you refinance after a few years for another 30-year mortgage, you may save money with a monthly rate reduction, but you will also be extending the life of your loan a few years.  Paying a little extra on your new loan each month will help you build equity faster and reduce the total amount of interest you pay.</h3> <h3 style="margin-left: 0.25in;">4. Leverage Your Financial Power</h3> <h3 style="margin-left: 0.25in;">If your finances have improved since receiving your first mortgage, consider refinancing for a shorter mortgage.  While you will have to pay more monthly, you will own your home faster and could save thousands in interest.</h3> <h3>      5. Know When You’ll Recoup Costs</h3> <h3 style="margin-left: 0.25in;">With refinancing, there are closing costs.  Calculate how long it will take you to recoup those costs and start saving money again.  If you can recoup these costs within 5 years, or better yet 3, you’ve made a good deal.  If you are considering selling, make sure that you won’t be selling until after that time frame or you will end up losing money.  </h3> <h3>      6. Shop Around</h3> <h3 style="margin-left: 0.25in;">Different lenders have different rates.  Even though rates are currently low, that doesn’t mean you’ll find the same ones everywhere.  </h3>

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