Refinancing 101 HELP!

[Michelle My Bell]

We may be interested in refinancing our home loan in the hopes of reducing our payment by a lot. The problem is, I don't even know where to begin to get information on HOW to do this. Should I use the internet, visit the bank or mortgage company? How do I know I will get the best deal?

Thanks for any help you could provide.

God Bless,
Michelle

[Beth in Central TX]

I always hear Dave Ramsey recommend refinancing through Churchill Mortgage (http://www.churchillmortgage.com/About_Churchill.php). We've been considering this too. Dave says that you shouldn't refinance unless you drop your current interest rate by at least 1 point. He also says that you should get a "par" quote meaning no points or origination fees. These fees represent prepaid interest to get a lower interest rate, but it makes your closing costs extremely high or you roll the cost back into your mortgage which defeats the purpose of refinancing. He also says that you should not refinance unless you are going to live in the house at least 5 years or more.

None of the above guidelines apply if you are trying to move from an ARM to a fixed rate. If you have an ARM, he suggests you do whatever you can to get a fixed rate loan.

HTH!

[Michelle My Bell]

Thank You! That was extreamly helpful!

Michelle