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Refinancing your mortgage may not be right for you

Mortgage rates are currently at record lows here in Georgia and throughout the rest of the United States. This has motivated many borrowers to refinance their homes in recent weeks and months at a higher frequency than they ever have done so before. Refinancing your mortgage isn't ideal for everyone. There are many factors that you should consider before ultimately deciding that refinancing is right for you.

If there is less than half a percentage point difference between the last time you refinanced and now, then refinancing may not be the best idea for you at this time. If your credit score has decreased since you last refinanced, then you might want to delay moving forward with the refinance process as well.

Refinancing your mortgage when you have only 20% equity built up in your home may not be ideal. Typical closing costs can be as much as 2% of your home's value. If you cannot comfortably cover those costs, then you may need to delay refinancing your mortgage.

While working with your current lender may feel familiar, you shouldn't let that motivate you to continue working exclusively with them. They may not be offering the best rate available.

A recent study published by Lending Tree captured how homeowners may end up paying as much as $66,000 in additional lifetime interest by getting only one quote. This is why many industry analysts recommend that homeowners get at least three quotes instead.

The quotes that you may receive as you reach out to different lenders may vary drastically. This is especially the case if you don't give each potential lender consistent information about your financial situation.

You should be careful to pay attention to the difference between the interest rate and the annual percentage rate (APR). The latter is the combination of the interest rate and other fees that have been added to your loan.

If you're considering refinancing your mortgage, then you should be aware that sometimes some things are too good to be true. For example, a "no-cost loan" in reality is a loan with no upfront costs. You may find that costs have been added on to your loan for you to pay later though. An attorney here in Augusta can provide you with personalized real estate law advice so that you can weigh your options and make the best choice for you and your family.

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