How to Decide If You Should Refinance Your Home Loan

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The decision whether to refinance your home is one that many Americans face everyday. Over the last 30 years interest rates have gone up and down numerous times. In the 80’s they were as high as 18%, and now some 30 year fixed rate loans are as low as 5%. Many homeowners who bought when interest rates were higher are now considering refinancing to reap the benefits of a lower interest rate.Some of the benefits of a lower interest rate are listed below:First, Lowering your interest rate will lower your monthly payment. With the economy in such terrible shape if you can lower your monthly mortgage payment could give some added relief to some homeowners. Even if it costs you some money to get a new loan you could save a great deal of money over the life of the loan.Secondly, changing the type of loan can be a possibility for you. Many homeowners may have flexible mortgages that have rates that can change, without very much notice. Also you may have a loan that has a balloon payment after a certain period of time. It may be very difficult for some people to come up with that payment in today’s touch economic times.Lastly, if you bought your house over 10 years ago, you may have equity in your home due to the appreciation of your home. Refinancing your loan and taking some money out of your homes equity is a good way of helping with your children’s education or making plans for a better retirement. If you are thinking about pulling out equity from your home make sure you discuss your plan with an experienced loan broker so you can be advised if you are making the right decision.