As mortgage rates continue to hover near the lowest level in decades, many homeowners may be tempted to refinance. But recent economic volatility--compounded by a slumped housing market, high unemployment and tightened credit from lenders--could complicate the decision. For those wondering if now is the time to refi, here are a few things to keep in mind.
- Take a look around. Your house might be suitable for you now, but how long do you plan to stay there? Are there factors, such as a growing family, that could spur you to move sooner rather than later?
- Do the math. Refinancing only makes sense if your long-term savings exceed your initial expenses.
- Read the fine print. Take a close look at the loan terms. Is the interest rate fixed or variable? How do fees factor in?
- Shop around. Compare offers, crunch some numbers, and make sure you have a good understanding of the terms and conditions before you sign.