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Refinancing Vermont Home

Vermont is not just known for its syrup, but it is also known for its beautiful homes. If you are lucky enough to own a home in Vermont, you need to be aware of ways that you can make your home pay off for you. Refinancing your Vermont home is a great way to keep your home as a smart investment. Knowing some basic tips about refinancing will get you on your way to saving money on your Vermont home.

Tip #1: Avoid High Fees

Did you know that there were fees associated with refinancing your Vermont home? Since refinancing is like getting a new mortgage, there will be similar fees involved. Most likely you will have to pay for appraisals, title searches, application processing, and more. Your lender should give you a good faith estimate on your closing costs, which will include fees, but you need to be prepared when you refinance. You should also check with your current lender to be sure you do not have to pay a pre-payment penalty fee, because it can often negate any saving from your refinance loan.

Tip #2: Do Not Pay Points

You should not refinance your Vermont home until refinance rates are at least 2 points lower than your current rate. However, some Vermont lenders will try to convince you to pay points to lower your refinance rate. However, it will take one year to pay off one point, so why not put your money toward your equity rather than to your lender? It may be better to put that money aside and put it toward your principle on your refinance loan.

Tip #3: Do not pay bi-weekly

One of the newer options on Vermont refinancing is to pay bi-weekly. Since most refinance loans are paid over 48 weeks, one per month, you will actually be paying more per year by paying bi-weekly, because you will make an extra mortgage payment. Although this may be a good refinance option for someone who is not disciplined, much of that extra payment will go toward interest rather than principle. Instead, you could save your money and make one payment directed to the principle on your Vermont refinance loan.

Tip #4: Get Fixed

Sometimes those adjustable rate refinance loans seem very attractive, but you want something that will keep you stable in the long term. In most cased, getting a fixed-rate refinance mortgage on your Vermont home will allow you to budget more accordingly and avoid the downfall of rising annual percentage rates. Only look at adjustable rate refinance mortgages if you are only planning to stay in your home for a few more years.

Tip #5: Set Your Goals

Be sure you know what you want to get out of your refinancing efforts before you jump into the process. Knowing your goals will direct you to the right product and the right lender. Know if you want to lower your monthly payment, pay your loan off faster, or get money for an addition before you refinance your Vermont home. Then shop around to find the right product at the right rate.


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