Home mortgage rates are still at record lows this year, according to Freddie Mac or the Federal Corporation for Home Mortgage Loans. For a 30-year mortgage this year, the rate is 4.5%, which is less than 5.2% last year. This year's rate is even lower than it was two years ago, which was 6.5%. What all this means is that home refinance rates are also at their lowest this year. If you are thinking about refinancing your home mortgage, there is no better time than now and take advantage of this year's rates, but only if you have the right reason why you want to refinance your mortgage.

One of the reasons, and the usual reason, why homeowners refinance their home mortgage is to take advantage of low rates. You can lower your monthly amortization with a lower interest rate, of course. You can save up to $ 7,560 in ten years by reducing your interest rate from 6% to 5.5% on a fixed-rate loan to $ 200,000 over 30 years. You can also switch from an adjustable rate mortgage to a fixed rate if you believe that home refinance rates will increase in the future. Rather, you can change from a fixed rate to an adjustable mortgage rate if you think the rates will continue to decline.

The other reasons some homeowners turn to home refinancing, aside from low home refinance rates, were to adjust the length of the mortgage. You can shorten or lengthen the term of your mortgage. If you want to finish paying off your mortgage faster, or increase your home equity faster, you may want to shorten the duration of your mortgage. Short-term refinancing generally has lower rates as well, so while you will have a higher monthly payment due to the shorter term, in the long run you will save money because you are paying a lower rate.

If you have been paying off your home mortgage for a long time, it may not be a good idea to refinance your mortgage even though there are much lower home refinance rates. This is because the longer you are paying off your mortgage, your payments will go toward paying off the main loan. If you resort to refinancing, you will restart the process again and pay the interest again. There are some mortgage loans that will charge you a hefty fee if you pay off your loan early, known as a prepayment penalty. It can also cover refinancing, so it's best to check with your lender first.

In addition to the prepayment penalty, you should also remember that every time you refinance, you will pay fees that can add up to thousands of dollars. You may have to pay refinancing fees that add up to 3% to 6% of your outstanding capital. Refinancing rates differ from state to state, and lenders also have their own rates that differ from other lenders. Even if your home refinance rates are low and you are tempted to refinance your home mortgage, it is best to consider these costs and compare them to how much money you can save, https://www.cambridgehomeloan.com/.

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