Mortgage Refinance Rates

Mortgage_Refinance_Rates

How do you determine whether a mortgage refinance or a home equity loan is best for you? Part of the decision is based on current mortgage refinance rates.

Whether you're simply looking to reduce your monthly costs or are interested in also withdrawing additional cash at the closing, use this rule of thumb in your decision-making process:

• If the current prime rate is below the average rate charged on 30-year fixed mortgages, home equity loans look attractive.
• However, if you need longer than 5-10 years to repay the loan with manageable payments, mortgage refinancing may be the plan for you.

Ask yourself why you're borrowing money - which may answer all or part of your question. Some home equity loans can be attractive, but may not be the best option for your situation if you'll have trouble paying it back in a shorter term than a 30-year mortgage through refinancing. Keep in mind that although you may find attractive mortgage refinance rates, you will incur additional costs - just as you did with the original first mortgage.

When mortgage refinance rates are lower than home equity loan interest rates, it may make more sense to use some of your equity by cashing out and refinance. Basically what happens is you're refinancing your first mortgage, increasing the balance and taking cash out (the difference between the old and new balances).

Check out this short form to get rate quotes and information from multiple lenders.