When it comes to lowering your rates you will need to weight the benefits of having a lower rate vs. paying points up front. You may end up paying a lot more depending on your choice and how long you plan on keeping your mortgage.
Give yourself plenty of time to close. With most refinancings, your file is turned over to a closing or title company, which dictates the closing details. Like the lenders themselves, these firms are swamped when interest rates are low. Moreover, appraisers get backed up and can be difficult to schedule. So don't expect the closing to happen as quickly as anyone promises.
If you are paying private insurance on your current mortgage, refinancing may allow you to do away with this unnecessary expense.
When you do a cash-out refinance you are leveraging the equity in your home in order to receive a lump sum of cash at closing. Many individuals and families use this type of loan if they want to remodel their home, or they have kids that are attending college soon. Veterans and other military personnel can now take advantage of a 100% cashout refinance thanks to the Veterans Benefits Improvement Act of 2008.
Weigh the costs carefully of how long you will be staying in your home vs. how much of a savings you will be getting in a refinance. Make sure you include closing costs in your decision.
