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If you are thinking of refinancing your mortgage you need to acquire some information. This article is about the refinancing process and how it works and how it will affect you. You don’t just need to know what the new interest rate is before you refinance. There are costs associated with refinance that you need to be aware of. Make sure that your mortgage does not have a penalty for early payment clause. If you have to pay a penalty to refinance the penalty may be greater than the savings of the refinance. If your mortgage is larger than normal you may want to refinance because of the savings over time of the lower interest rate. Even factoring in the cost, you may save more in the long run by refinancing.

When you refinance you are asking the lender to change the terms of your original mortgage. You are going to pay off your original loan amount with the proceeds of the new note. You will want to make sure that the new note is a better financial option before you refinance. You are probably going to find that your current lender will be who you select for the refinance. After shopping around you may find that he will match or better any of the offers that you get from other sources. He will want to keep your business if you have a good payment history with his firm. You won’t always have to refinance in that case. You might be able to get your lender to agree to change the terms on your mortgage and save the cost of closing on another loan.

Usually borrowers will want to refinance to shorten the length of time for repayment on the note. This usually happens when a 30 year note with the lower payments were a more affordable option than a 15 year note with higher payments. If you are making more money now than when you qualified for your first mortgage you may want to save the interest on the longer finance period and shorten your note. You may just want to take advantage of the lower interest rates that are being offered. With rates at an all time low, now is the time to refinance if you qualify. You may be approaching difficulty in repayment of the note due to job loss, divorce or unexpected medical bills. Refinance would be an option for you to lower payments and extend the note so that you will not default on payments. For those of you who have a variable interest rate loan you may want to change to a fixed rate note of 15 years or 30 years. This would lock in an interest rate so that if rates begin to increase, you will not have to pay higher rates.

What ever reason you have for refinance, you will find that the process is very much like the process you went through to get your first mortgage. You will apply, be approved or denied, and if approved you will go to closing and you will successfully have completed the refinance process.