Refinancing Tips

Refinancing can save you lots of money.

Many are refinancing in order to save thousands of dollars in interest. Compare annual percentage rates among reputable lenders. I like Bankrate.com. If you can reduce your existing rate, pick a broker based on their reviews. Compute the time to recover your closing costs then lock into a fixed rate. Aim to own more than 20% to avoid paying PMI, and read the fine print.

Can you prepay without penalty? A shorter-term reduces interest but may raise monthly payments. Longer terms lower payments but increase interest. Be careful drawing equity out of a home for cash. If home prices fall, you could end up underwater. 

For more Biblical principles and practical advice, visit crown.org.