Ask John and Donna?


Would you advise refinancing our home at a lower interest rate?	
	Maybe. When interest rates are low, some homeowners rush to refinance before evaluating the true consequences of their actions. A mortgage refinance can benefit you if you intend to stay in your home for the long term, and if it significantly reduces your interest rate. But a mortgage refinance can also be the wrong move.
	Don't make a poor decision based on interest rate envy. There's more to it than being able to brag to your neighbors about your lower interest rate.
	The objective of a new loan
	The first step when deciding to refinance is to establish a clear objective. For example, if you think you might lose your job, but you have one now, your focus should be to lower your overall payment regardless of the length of the loan. If you want to be debt-free by a certain year, you need to find a loan that meets that objective.
	There can be an advantage to going to the same servicer that handles your loan now. They may require less documentation, but talk to at least one other lender and compare costs and fees.
	Shop for a mortgage by comparing the APR (annual percentage rate) of each loan, rather than the quoted interest rate. Make sure you will really be saving one-half point or more on the new loan.
	The HARP Loan
	A current appraisal might show that your home is worth less than you assumed.
	Fannie Mae and Freddie Mac have added fees on loans with a high loan-to-value.
	If you find you have little or no equity, you may qualify for a refinance under the government's Home Affordable Refinance Program, or HARP, if you have a current mortgage owned or guaranteed by Fannie Mae or Freddie Mac.
	The beauty of the HARP program is that it does not require an appraisal. If you suspect you are underwater on your loan, this could be a good option. Still, be sure you compare the rate and fees to see if the new loan is worth the cost.