- 1). See How to Shop for a Mortgage and How to Obtain a Home Equity Loan for a summary of the process.
- 2). Ask yourself how long you're going to stay in your home. Divide the cost of refinancing by 12 to find out how many months you need to stay put for a refinance to be monetarily worthwhile. Typically you need to stay put for at least three years and secure a rate at least 1 percent lower in order for refinancing to make sense.
- 3). Contact your current lender first if you've just purchased your home. With a recent appraisal on file, you may save closing costs and be able to move more quickly by working with the same mortgagor. Investigate online lenders as well.
- 4). Pay attention to fees and closing costs, as with a first mortgage. These will include the cost of getting your house reappraised and may differ a great deal from one lender to another.
- 5). Consider limiting the term to be no longer than what is left on your current mortgage, or you'll end up with much lower payments but a much longer mortgage.
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