Tips on when to refinance your home mortgage 

You can see ads like this everywhere -- "Lower your monthly mortgage payment", or "Save thousands! Refinance now!" But is a lower mortgage payment always the best answer? Don't assume so without doing your research. Refinancing a home mortgage can be tricky business. Be sure to do your research so as not to get yourself into a bind. Make sure to go into refinancing a home loan with your eyes wide open and consult a reputable professional.

Mistake #1: Waiting for lower interest rates Interest rates go up and down every day (several times a day). Don't waste your time speculating on whether or not they have bottomed out. When rates are attractive, go ahead and lock that rate, and start the ball rolling on a refi. If they go down substantially before you finalize the loan, you can always switch lenders. If they go up, you'll be glad you locked that initial rate in...

Mistake #2: Not checking with more than one mortgage broker. E-loan, Lending Tree, and other online mortgage shopping sites are great, but be careful! Granted, they are national mortgage shopping sites, and that might sound nice because you get mortgage lenders from across the nation competing for your business, but be aware - any lender other than a mortgage lender familiar with your local state's practices might get you into trouble. It might not only cost you that lower interest rate, but depending on your other circumstances, it could actually cause your rates to go up.

Mistake #3: Focusing on the interest rate, and not the rest of the terms. With the majority of a loan's interest paid at the beginning of the loan period, refinancing usually only makes sense in the first couple of years. To put it simply; Saving fifty bucks a month might sound great until you reach the time your old loan would have been paid off, and then you realize you have a remaining 5 years at $1500 a month. It might hit you then that it cost you more than you saved. Think about it like pushing a heavy car... It's a lot of hard work to get the car started, but once you get it going, you have momentum working for you. However, once you refinance, it's like having to come to a complete stop, and start all over again.

Be sure to get a good faith estimate and Truth in Lending statement from your mortgage broker before jumping into something that could cost you more than you save in the future. Get your mortgage broker to compare how your current loan's rate, total payoff, and remaining number of payments compares to what you're looking at if you go through with this refinance. Take all of these steps, and you'll do great! About the Author Joel McDonald For more articles like this, visit this link about Mortgage refinance rates.