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Refinancing your mortgage is a very important financial decision and when done incorrectly can cost you thousands of dollars in closing costs and interest payments. When most people begin their loan process the first thing they do is to call local mortgage companies and banks and ask what the current mortgage refinance rates are. While interest rates are a very important part of the mortgage refinance process they are not the only part and by focusing only on rate you could be headed for trouble.

In most cases when you call a mortgage company to check current mortgage refinance rates they will quote you an interest rate that requires points to be paid on the loan. Points are a percentage of the loan amount, so one point is one percent of the total loan amount. Generally a loan where a point is paid will be one half percent lower then a loan where no points are paid.

At first glance the low rate seems to be worth the extra money paid,but what if you refinance again or sell your home before the savings can be to your benefit? For example if you pay $2000 to get a lower rate that lowers your payment by $60 a month you would have to keep that loan for just under 3 years for the savings to take affect, once they do however you would be saving $720 a year.

Statistics show that the average home owner refinances about every 4-5 years and if that statistic applies to you then you should reconsider paying points on a mortgage loan. So do the math and take your situation in consideration when calling for current mortgage refinance rates.

Gain valuable knowledge on How To Refinance a Mortgage to benefit you and not the mortgage company.