A financial decision such as mortgage refinancing is a daunting talk – and for a good reason. Your home is the single, biggest, and most important investment you can have in your lifetime. Losing it with a misjudged or unintelligent move would mean you have to start all over again. Hence, if you are considering such financial move, there is no better way to begin than by starting at the right foot.

Step 1: Quiz people you know

The first thing you should remember when refinancing your mortgage is to look for a “reputable company.” The prevailing rate may be low, but if you land on a company that thinks more of profit than their client, then it’ll be useless. A good way to begin searching for a company is through your friends, family or neighbors, or co-workers. Ask them about their mortgage lender. Armed with a list, start calling companies one by one. Local ones are more familiar with local market so they can be a good source of accurate estimates.

Step 2: Go online

Do not drop online source. Begin searching for companies online and compare. See if you can get competitive rates. Usually, online companies operate nationwide and have offices in major cities.

Step 3: Know the cost

The reason why you refinance your mortgage is basically to get lower rates, save on monthly payment and save on total cost of mortgage. However, buying out your existing loan to get a new one can be costly and recouping the cost of refinancing cannot be felt instantly. You must, therefore analyze the cost of your new loan and compare it with the savings you’ll get each month. There, you’ll know when will be your “break-even point.” Know how much you will have to spend on fees and points. Ask your lender about the