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Raleigh Real Estate Answers – Are you considering refinancing your Raleigh, NC home?

It is important to understand that refinancing is not the best option for everyone. The generally accepted wisdom is that if your current interest rate is 2 percentage points higher than current mortgage interest rates, then it probably makes sense to refinance. This is based upon the average costs that are incurred in refinancing a loan.

A major factor to consider in making a decision to refinance is how long you plan to stay in your home. The costs incurred in refinancing usually take at least three years to “pay off” at the lower interest rate.

Refinancing your Raleigh NC home might also be a good idea if you have an adjustable rate mortgage (ARM) and you would like to have the certainty of knowing exactly what the mortgage payment will be for the life of the loan.

If you want to build equity in your home or pay it off quicker, you might want to refinance into a shorter term loan. Current 15 year interest rates are still very low – today’s 15 year fixed rate for very well qualified borrowers from at least one mortgage broker is 4.0% , APR 4.135%.

Another reason to refinance may be to draw on the equity that you have built up in your home to get cash for a major purchase or to pay for the education of your children.

For more information on Home Mortgages check out the following resources published by the Federal Reserve Board:

A Consumers Guide to Home Mortgages

A Consumer’s Guide to Mortgage Lock-Ins

Understanding the Process and Your Right to Fair Lending

The Marti Hampton team would be happy to recommend a number of qualified mortgage lenders to help you with your particular situation.

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