How do you know if a refinance is a good option for your situation?  The best way is to talk with a mortgage professional.  By doing so, you can look at many different options that fit your particular situation.  Your financial position and your credit rating will have a direct impact on the type of refinance terms you can qualify for.  By talking with a professional directly, you will have accurate numbers and will be able to compare the cost of refinancing to the benefits. 

You can also use our mortgage calculators online to see if a refinance has the potential to better your situation.  You can play with the numbers, rates, terms, etc. and have a good idea of what would be a benefit for your situation.  If you are in an adjustable rate mortgage currently, now is an excellent time to explore a fixed rate solution.  Rates are once again near historic lows, and even though lending standards have tightened, the climate has created a great opportunity for credit worthy borrowers to take advantage of.

In general, you are going to have costs associated with any refinance. This is known in the business as points and/or closing costs, where every point is equal to one percent of the total amount of the loan.  There are options available for no point, no cost refinance transactions, but you should compare the terms of these loans to the terms on loans that do carry fees.  Typically, you are going to end up with a higher rate if you choose a no closing cost type of loan. 

Additionally, it may be beneficial to look into paying additional points to lower the rate.  Many borrowers do not see the benefit of paying points, but it is a very good option for many situations.  For example, if you are refinancing into a 30 year fixed mortgage, and you plan on staying in your home for a period of time, it may be beneficial in the long run to pay additional up front fees in exchange for a lower interest rate and monthly payment for the life of the loan.  Your mortgage professional can lay these numbers out for you so you are able to make the proper, informed decision that meets your needs.

As always, feel free to contact me directly with any questions.  If you are a California home owner looking into refinancing options, I can help find the best solution for your needs.