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Refinance Your Current Mortgage to Lower Your Points and Save

By Hilary Bowman
Your mortgage payment is most likely the most expensive payment that you make each month – and chances are that you can get a better rate that can save you hundreds on your monthly payment and thousands over the life of your mortgage. It may be time for you to join the many other homeowners who have refinanced their outrageous mortgages to more affordable terms. Refinancing just one point lower in terms of interest can lower your monthly payment significantly. (continued below)

4 Simple Ways to Pay Your Mortgage Off Early

Fixed Rate Equals Savings For Most Homeowners
There are many ways that a mortgage refinance can save you money. Most commonly, if you have an adjustable rate mortgage (ARM), refinancing to a fixed rate can garner you payments that are predictable, unlike an the rates in an adjustable rate mortgage that are based on financial indexes determined by factors like the rate the government places on treasury bonds.

If you plan to be in your home for the long haul, an adjustable rate mortgage can end up costing you many thousand dollars more than a fixed rate mortgage because the adjustable rate mortgage will reset at certain intervals – and we have all seen the rapidness at which the market can fluctuate, raising the ARM payments along with it.

Cash Out Equity During Refinance

One great action that you can take during your mortgage refinance is to ask for cash that is equal to or less than the equity in your home. This can be a wonderful and easy way for you to finance major home improvements, renovations, major purchases, or education. The average equity cash out is around $30,000, and this amount will be refinanced in with your new mortgage loan.

Many homeowners also take the opportunity to cash out equity to pay down higher interest loans or credit cards. Depending on the rate that your mortgage is refinanced at, you might want to include high interest credit card balances, personal loans, student loans, automobile loans, or other loans that you are paying more on. By ridding yourself of multiple debts and just paying one lender, you can streamline your payments each month while saving yourself some cash.

Tax Deductible Interest
Because the interest paid on mortgages is deductible on your personal income tax return, it makes perfect sense to rid yourself of debt that is not tax deductible. Over time, tax savings on debt refinanced to your new mortgage can be quite substantial.

To save additional dollars on your mortgage refinance, you should look for companies who are offering reduced or no closing fees, especially ones that do not require you to pay for another appraisal. Other costs that might be associated include origination fees and processing fees. Companies from time to time will offer specials on your refinance that will reduce or eliminate these fees.

Online lenders are a great source of good deals for mortgage refinance options. Online lenders also tend to offer greater reductions on interest rates and more pleasant repayment options than traditional lending institutions.

Hilary Bowman is the author of this article. She works successfully as a financial advisor with years of expertise on Unsecured Loans. Hilary publishes informative articles about home loans, credit cards, auto loans, loans for bad credit, business loans and others at

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