You've undoubtedly heard about the housing crisis that has hit all over the United States in the last few years along with reports of decreasing interest rates and refinancing present mortgages. If you live in or around the Madison, WI area, you may well be wondering where you can go to get an ideal refinance that will lower your house payments and maybe even keep you from foreclosure. In order to do a wise job of your Madison refinance, you need to educate yourself on every facet of the process so that you know what to expect and how to avoid hidden charges and mortgage traps.
The first thing you need to do is decide if a refinance is really the best step for you to take at this point. Just because current interest rates seem low, that doesn't mean that all the conditions are right. Some of the questions you need to find answers to include:
1. How long do you plan to continue living in your house? If you're planning to sell within the next few years, then you probably will end up paying more to refinance than you'll actually get back out of the lowered rates.
2. How much equity have you built up in your home? If you have a lot, it may be to your advantage to take out a home equity loan or utilize cash-out financing rather than doing an actual refinance.
3. Are you paying mortgage insurance on your current mortgage? If you are, it's possible that by refinancing you'd eliminate the need to do so.
4. How much will closing costs be on your new loan? If your reason for refinancing is that you are going through a financial crisis, then the amount of the closing costs may prohibit you from taking out a new loan.
The second thing you need to educate yourself about is what interest rates you should expect and the going rate for lending fees and closing costs. If you know what other people are paying, you'll be able to recognize if a lender is offering you a good deal. You want to find the lender that will offer you the best rate along with the lowest fees in order for you to come out on the plus side with your Madison refinance. Get quotes from several lenders, if possible, so that you can choose the one who's willing to do the best for you. Right now the rates in the Madison area are between 3.625 and 4.625, so if you get a quote for something in that range, you know your lender is being honest with you.
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