When you are stuck with increasing mortgage payments it often becomes an expense impossible to afford. In such situations you may want to opt for a mortgage refinance. With the current mortgage turmoil in the market, many people are looking for a way to refinance from their current adjustable rate mortgage to a fixed rate mortgage. To be more precise, refinancing your mortgage is the best option to save your home. But you should know when to opt for a mortgage refinance.

When you are looking forward to refinance your mortgage there are certain elements you need to look into. You need to shop around for the lowest interest rate possible. A small difference in the interest rate can make a big difference in your expendable income over time.

Getting a low interest rate will not be a difficult task for you as you are refinancing your existing mortgage loan. Another advantage of getting a mortgage refinance loan with lower interest rates, is of all the time you spent paying your current mortgage loan consequently your credit score goes up and with better credit score and payment history you will be able to qualify for a refinance mortgage loan with lower interest rate that will save your money.

Mortgage refinance can be worthwhile, but you should know that it is not a good financial move for everyone. Refinancing your mortgage becomes worthwhile when the current interest rate on your mortgage is at least 2-percentage point higher than the prevailing market rate. This rate is generally accepted as the safe margin when balancing the costs of refinancing a mortgage against the savings.

There are also other considerations you need to look into before you opt for a mortgage refinance. You need to look into the time period you intend to stay in your house. It is commonly said that it takes at least 3 years to realize fully about the savings from a lower interest rate, given the costs of the refinancing.

When to opt for a mortgage refinance? This can be well understood with the help of the following points:

- You can opt for a mortgage refinance when you have an adjustable rate mortgage (ARM) and you want a fixed-rate loan that can offer you a certainty of the mortgage payment to remain stable for the life of the loan.

- You can opt for a mortgage refinance when you want to convert to an ARM with a lower interest rate or more protective features than the ARM you currently have. Such as better rates and payment limit.

- When you want to get out of the higher interest rate loan to take advantage of the lower rates. But this is only advisable if you intend to stay in your house long enough to make the additional fees worthwhile.

- You can also opt for a mortgage refinance when you want to build up equity more quickly by converting to a loan with a shorter term.

- You can opt for a mortgage refinance when you want to draw on the equity built up in your house to get cash for a major purchase or for children's education.