Refinance Your Mortgage
If you can improve your interest rate by at least two percentage points, then it is a good time to refinance. While that may work as a general rule, the truth is that there are many reasons to refinance.
What is Prepayment?
Prepayment is when your mortgage is paid in full before the due date. If you’ve been thinking of refinancing your mortgage, it’s important to see if any prepayment penalties exist on your current mortgage.
If you do have a prepayment penalty in your current mortgage, that doesn’t necessarily mean refinancing is the wrong choice for you. Depending on the type of loan you may qualify for, your credit score, or current interest rates, you may still be able to lower your monthly payment—even with the prepayment penalty factored in.