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Introduction.

One of the most frequently asked questions by many mortgage holders these days is whether or not they should re-finance their mortgage. Of course there is no one single answer to that question; and each case needs considering on its own merits. However, hopefully you’ll find the following information about refinancing mortgages helpful when considering whether to refinance or not.

Fixed and adjustable mortgages.

Mortgages come in a range of financial products but are essentially either at a fixed rate, where you pay one percentage interest rate throughout the life of the mortgage or an adjustable rate mortgage, where the interest rate will vary as the prime index one does. Fixed rate mortgages tend to be lower, across the life of the mortgage, but are usually only available to people with top credit scores who are unlikely to default on any payments. Conversely, if you have a poor credit score chances are you’ll have been offered an ARM, which although usually working out at an overall higher interest rate over the life of the mortgage, it will have a cap on how far it can rise at any one time and could, if the markets are right, fall below the interest rates paid on fixed mortgages. The question regarding re-financing really applies to switching ARMs, or if possible switching from an as ARM to a fixed mortgage, as with a fixed mortgage you can budget and plan ahead better for repaying it. There are a number of hybrid fixed-adjustable mortgages too, offering deals like a fixed rate for 5 years followed by a return to adjustable rates.

Is it worth it?

Securing your home with a refinance mortgage could be important for all of your family's sake.

To decide whether or not to refinance your mortgage simply ask yourself – is it worth it or not? Determining the answer to that question isn’t just to do with whether or not your monthly mortgage repayment drops or not. You also have to find out if it will cost you anything to switch mortgage companies in application fees, loan origination fees etc. If it does then refinancing mortgages rarely pays off in the long run. However, a mortgage refinance package that would be good right now is an ARM one so you can get a lower interest rate now or better still a hybrid one – giving you a few years at the current low rates, to help you through what is generally a depressed time economically.