Going through the process of refinancing one's mortgage is an advantageous move, but it must be done well and properly. The objective for anyone is to save money by lowering one's interest rate and shortening the length of a loan's life. Conducting a mortgage refinance successfully involves selecting a lender with knowledge, one of which is completely aware of all the characteristics involved with such a financial motion including and not limiting to the overall features and the obvious advantages and disadvantages. Without doing this, one can end up in a sticky mortgage refinancing position.

After all, it isn't out of the ordinary for individuals who are refinancing their home to end up paying substantially more than they were initially, despite after a mortgage refinance is complete. Be organized and certain about mortgage refinancing and take some questions and concerns into consideration.

Consider Paying Points

Points are usually paid upfront, representing just one overall percentage point of a whole loan value. Now, if one opts to pay points the interest rate attached is lowered considerably. This sounds appealing, but don't jump into paying points until one has considered the following. A major factor to weigh before paying any amount of points on a new refinanced loan is just how long one plans on residing on their property.

Clearly, if one plans on moving in the relatively near future, it would be wise not to pay points. Yet, on the other hand, if one is aiming to live in their home for roughly (give or take) 20 or more years, then paying points would prove beneficial in the long run.

Mortgage Types: Long-Term & Short-Term

Choosing between the two is simply figuring out how long one wants to live in a particular home and working their income into such considerations. A long-term mortgage is one that is extended a bit beyond the life span of a representative loan; typically, a mortgage may be anywhere from 15-30 years in duration, while a long-term mortgage is stretched out and prolonged a few more years, 40 or 50 years or more in length. Short-term mortgages are mortgages that need to be paid in less than 30 years.

Here's the scoop on the two. If one opts for a long-term mortgage, interest rates are high, yet, to ones advantage, monthly payments are much more affordable. On the other hand, if one opts for a short-term mortgage, paid interest rates will be much lower than a long-term loan. Yet, monthly payments long-term wise are substantially higher than short-term mortgages.

Fixed Or Adjustable: Which Is Best?

Choosing between a fixed-rate or adjustable-rate mortgage (or ARM) is an all too important decision anyone must make carefully, especially considering that it, in essence, decides and outlines future payment amounts. Again, choosing here should be conducted by knowing how long one expects to live in their home.

ARMs are suitable in a case of staying with a home for up to 10 years, with initial low rates, but heftier monthly payments. Fixed-rate mortgages are great for long-term home aspirations simply because they are strictly defined and provide financial -not to mention mental- stability. The monthly payment does not decrease or increase as it stays the same, yet, consider that interest rates are somewhat higher here than that of an ARM.