Consumer News: Refinancing

Mortgage rates have been dropping like a stone lately. So should you consider possibly refinancing your loan? As Jessica Doyle reports in today's Consumer Watch...homeowners could face a hurdle in the refinancing process.

GOOD NEWS HOMEOWNERS:

"We're beginning to see early signs of improvement in the economic environment, most importantly, lower interest rates. But lower interest rates mean you have a big opportunity to refinance your mortgage."

WITH MORTGAGE RATES DROPPING TO THEIR LOWEST LEVELS IN A LONG TIME --- REFINANCING ACTIVITY SURGED NEARLY 63 PERCENT IN A LATE DECEMBER SURVEY FROM THE MORTGAGE BANKERS ASSOCIATION, COMPARED TO THE WEEK BEFORE.

IF YOU ARE THINKING ABOUT TRYING TO CAPTURE A LOWER INTEREST RATE FOR YOUR MORTGAGE TO SAVE A FEW BUCKS -- THE FIRST QUESTION YOU NEED TO ASK:

"Does refinancing lower your monthly cost? If it does, you win. If it doesn't, then sit tight and check back in a month."

BUT WITH HOME VALUES DROPPING, YOUR HOUSE MAY NOT APPRAISE HIGH ENOUGH TO QUALIFY FOR A LOAN.

IF THAT'S THE CASE, AND YOU CHOOSE NOT TO MOVE FORWARD WITH THE LOAN, YOU'LL STILL HAVE TO PAY THE APPRAISAL FEE, WHICH TYPICALLY COSTS AT LEAST 300
DOLLARS.

IT PAYS TO DO YOUR HOMEWORK BEFORE YOU START THE PROCESS  TO GET AN IDEA OF YOUR HOME'S CURRENT VALUE ---

-CALL A LOCAL REAL ESTATE AGENT.

- LOOK ONLINE AT HOME VALUATION SITES SUCH AS ZILLOW.COM.

- OR EVEN ASK YOUR APPRAISER AHEAD OF TIME FOR A BALLPARK BASED ON YOUR NEIGHBORHOOD.

FOR CONSUMER WATCH, I'M JESSICA DOYLE.