When Is the Right Time to Refinance?
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When is the right time to refinance?
Before you refinance loans, you need to know whether or not it's the right time to do so. Refinancing loans is easy to do, but that doesn't mean it's a decision that should be taken lightly. Here are three times when refinancing loans may be a good idea:
- Refinance rates are lower than your original mortgage rates. If you can save money over the duration of your loan with a lower rate, it's probably a good time to refinance. Just make sure that additional closing costs and fees are paid out of pocket rather than added to the loan and interest.
- You find a lender willing to refinance with low refinance rates and low fees. Large fees can take away much of the benefit of refinancing, so finding a lender that offers low interest and low fees makes it a good time to refinance.
- Your income has changed, necessitating lower payments. If you've lost your job or taken a pay cut, it might make sense to refinance in an effort to lower your monthly payment. Lower rates and a longer loan duration will work together to reduce your monthly payment.