Homeowners are always looking to cut costs and many are interested in a mortgage refinance option that can accomplish this. However, this will only be beneficial if the mortgage refinance interest rates are favorable. If the interest rates are only a little bit lower than their current rate it will not be beneficial for a homeowner to refinance. The average rule of thumb when it comes to refinancing is if the interest rate is a whole point lower than what the homeowner is currently paying then more than likely it is time to refinance.
A homeowner may choose to refinance for many different reasons. Homeowners that are not looking to refinance simply to get a lower rate are not as affected by the mortgage refinancing interest rates as another homeowner may be. Some homeowners have an adjustable rate mortgage and want to get out of their loan before it starts to adjust and the prices on their mortgage go up. These homeowners are looking for the comfort in the security with knowing what their monthly payment is going to be for an extended term. Many of these homeowners do not mind refinancing for another adjustable rate mortgage, but some want a fixed rate mortgage so that they can give them self some security. At the end of the day, homeowners with an adjustable rate mortgage will probably choose to get another adjustable rate mortgage because the interest rate on an adjustable rate mortgage is much lower than the rate on a fixed rate mortgage.
Then there are the homeowners that want to refinance their home but it has nothing to do with mortgage refinancing interest rates or the type of mortgage that they are currently in. Some people just want to get the equity out of their property and get cash in hand. This is called a cash out mortgage refinance. People do this for all types of different reasons. Many people do it to pay off other debt or fix up their homes, other people use this equity to make investments. This is when mortgage refinance interest rates come back into play. If mortgage refinance interest rates are low enough some people will cash out the equity on their homes and invest it in attempt to get a better return on investment. This can be a great strategy if the timing is right and they know what they are doing.