Home Mortgage Refinancing the Right Way

There are a lot of homeowners who think that a mortgage refinance can be used as some kind of personal financial bailout, in case of emergency. If you count on your home getting you out of a tough financial situation, join the club. Some misconceptions about how a mortgage refinance should be used are widespread and common beliefs a lot of homeowners have. Here are some of the things that a home mortgage refinance should not be used, or considered, or counted on for.

Mortgage Refinancing Is Not An End All Solution To Financial Problems
This is probably the number one idea people get stuck in their heads. Basically, it is commonly believed that a mortgage refinance can be used to end all of your other financial woes. Generally, this homeowner believes that a mortgage refinance has helped them earlier in life and can help them again, and again. While this may hold true for the first, maybe second time, it will get harder and harder to find a lender who will work with you. The lender will see that their is another problem somewhere in your financial planning, that has casued you to be in debt so often, for so much. The rates will increase, the fees will increase, and the more you refinance the more you will put your home in risk of being taken by the bank should you miss a payment.

I can refinance my mortgage should an emergency come up.
Technically, it can be used as an emergency plan, but should not. You should not be getting into emergency financial situations often enough to be even comfortable considering a refinance, let alone execute one. Its bad habit, think of your home as the only thing that will be there forever. It should not just be used at your will to free burden that has been building up. You should act on financial irresponsibility in other ways.

I can refinance for any reason I want.
Again, technically you can refinance your home for any reason you want. However, you should only refinance to save on interest rates, or to shorten the length of an existing mortgage. Both of these reason are good financially sound reasons to refinance. Dont use a refinance to purchase non nesscary items or services. Use it only to better your long term financial position. Do not take it for granted you are putting your home one the line with a home mortgage refinance.

Refinance only if you can get a loan rate 2% or more lower than your current rate. This will save you money every month and ensure you get a good refinancing deal. Do not forget to add closing costs to the total. Often these can be added to the loan, but they should be paid if you can by cash. Shop your quote around to different mortgage lenders and see which terms rates and conditions fit your needs.
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Mortgage Rate Predictions for 2009. Their is no doubt that the rough economy and the unstable housing market play a huge role in predicting home mortgage interest rates for 2009, however it is possible to come up with a good idea as to where the rates are headed. Here are some good ideas as to where mortgage rates should head for 2009.

Everyone is wondering where mortgage rates will go throughout 2009. Currently, mortgage rates are at a near all time low. In many markets, the mortgage interest rates are under 5% for a fixed rate 15 year mortgage. However, the only homeowners who can take full advantage of the lowest of the low rates have a FICO score over 700 and 20% to put down on the mortgage. Refinancing yo can expect a rate around 5.25% if you have good credit and good finances. Even with what I said above, many homeowners will be able to benefit financially from a mortgage refinance.

Mortgage Rates: 2009
Although nobody can be 100% sure where the rates will go, I do like to think I have a pretty good idea. I predict that due to refinance applications currently coming to lenders offices at record paces, that mortgage rates will temporarily increase. This is due to mortgage lenders being back worked from processing all of the paperwork coming in. While the temporary rate increase goes into affect they will be able to catch up on paper work and realize that they we're a lot busier with the lower rate being advertised. Over all I predict that home mortgage rates for 2009 will take a temporary .5% increase followed by steady steep declines throughout 2009.

It is generally a good idea if you are looking into refinancing to do it now. Get a locked in quoted rate on paper and you can potentially save hundreds of dollars per month.