Many people look at nothing but interest rates when theyre considering whether the time is right for a mortgage refinance. But remember that theres more to the mortgage than the interest rates. In many cases, the terms of the mortgage may be sufficient reason for mortgage refinance.
One of the most common term issues that prompt a mortgage refinance is the difference between a variable rate and fixed rate loan. There is only one very basic difference between the two. A variable rate loan is exactly what it sounds like. The loan payments vary from month to month and the borrower pays whatever amount is designated by the current prime interest rate (a consensus among certain lenders of what interest rates should be). There are several negative points associated with a variable rate mortgage.
The first and most inconvenient is that you never know exactly how much your mortgage payment will be this month. Payments may remain fairly steady, but there will always be some variation. Depending on the terms of your loan, you may find yourself paying late fees or incredibly high interest on any portion of the payment you fail to make even if its an oversight because you...
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