Refinancing your home mortgage can help to lower your monthly mortgage payments, consolidate your debt, and help you to use the equity in your home to pay for important home repair projects.

How do you know if this is a good time for you to refinance?

Michel's (of Lendadvisors.com) article titled, "Is it not too late to refinance mortgages?" provides seven factors for homeowners to consider when refinancing their home:

1.  Are the interest rates lower in today's market than they were when you purchased your home?  I

A lower interest rate will decrease the money that you have to pay over the term of the mortgage and will decrease your monthly mortgage payments.  If the interest rate is not much lower than your current interest rate, the closing costs involved in refinancing your loan might use up the money you save on the interest rate.

2.  Do you have any equity in your home?

When you refinance your home, a new mortgage is taken out on your home.  This mortgage then pays off your existing first mortgage on the home.  The money that is left (the equity) in your home can sometimes be used to consolidate credit card debt, payoff car loans or student loans, and pay for home improvements.   Also, if you have an Adjustable Rate Mortgage you may be able to refinance to a lower, fixed rate mortgage.

3.  Have you compared loan terms, closing costs, and interest rates with more than one lender?

As with any big purchase, you need to do some comparison shopping to see which lender can offer you the best rate with the least cost to you.  Get at least three estimates from mortgage lenders and compare them against one another before you make a decision.  Michel's article recommends asking mortgage lenders for a best rate guarantee in which the lenders:

"guarantee that their rate is the lowest in the market at closing date and even agree to pay you a certain amount if they are not the lowest on that particular date"

Use the above factors as a checklist to consider whether refinancing is a good option for you.  Investigate current interest rates in your area, ask your current lender about your options, get additional estimates from other lenders.

Posted by Rebecca D. Levinson

Read more ... http://connect2agentconsumers.typepad.com/homebuyerseller/2007/09/homesellers-thr.html.