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When should I refinance my home mortgage?

        There are three options to consider when refinancing:
• Do you want to obtain a lower monthly payment?
• Do you want to pay off your mortgage early?
• Do you want a lower monthly payment without lengthening the term of your loan?
        In addition to these options, also consider how long it will take you to get back the money you spend on your home mortgage refinance closing costs with the savings in your monthly payments.
        "As we all know, for many of us, our home is our largest investment and our largest asset," said JJ Puccio, a State Farm Insurance agent in Statesboro. "Refinancing can be a way to reduce your payments or reduce the number of years for a loan or even help pay for an addition to your home. It can be a very valuable financial tool for people but they need to be sure it makes sense for them."
        You need to know your current rate and the rate at which you would refinance.
        Virtually all home mortgage refinances at a lower rate will pay for your home mortgage refinance costs eventually. The questions become:
• How soon do you want to realize these savings?
• Will you realize these savings before you expect to purchase another home?
        If you expect to live in your home for another three to five years, your monthly savings will generally offset the costs of your home mortgage refinance within that time.
        If you plan to stay in your property for a shorter period, or if it will take significantly longer to recognize your monthly savings, you may want to consider other options.
        You may also want to evaluate how many years will be added to your mortgage payments. You may not want to add another 10 or 15 years to your mortgage payments if you only have 10 years remaining.
        You may want to pay off your mortgage early. To do this, consider refinancing to the lower payment, but continue making a higher payment to pay off the mortgage early.
        Finally, you may not want to extend the term of your loan. Review the new rate and payment based on the remaining years you have left on your current mortgage and determine if you have monthly savings.
        Home mortgage refinancing costs are very much like the costs paid for your original mortgage. These costs may include, but are not limited to:
• Appraisal fee
• Property survey
Hazard insurance
• Attorney/legal fees
• Mortgage insurance, if applicable
• Loan origination fees
• Title search/insurance fees
• Credit report fee
• Flood determination fee
        The sum of these fees could cost you up to 2-5 percent of the loan amount, depending on your property location. But there are options available to deal with these costs.
        This information is intended to help you ask the right questions when considering a possible refinancing of your loan or a home equity product.
        This article is sponsored by JJ Puccio, an agent for State Farm in Statesboro. He can be reached at (912) 764-9061, or visit him at 102 N. College St.

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