Should You Make the Decision to Re-Finance?
The decision to re-finance a home mortgage is a serious decision
which should not be taken lightly. Homeowners should give this
decision a great deal of consideration to ensure they are making the
best possible decision for their financial situation and personal
needs. Some factors to consider when deciding whether or not to
re-finance is the type of loan to choose, the lender to choose, the
costs associated with re-financing and the hassle of the process.
Consider All of the Options
Homeowners who are seriously considering re-financing owe it to
themselves to consider all of the options available to them. They
may have a friend who recently refinanced with a specific type of
loan but this might not be the solution for all homeowners. Each
homeowner should consider their situation to be individual and not
likely to closely mirror the situations of others.
Some of the options to consider include the type of re-financing
loan. The basic options are fixed interest rates and adjustable
interest rates. There are also mortgages which combine these two
options. The homeowner may have a specific type of mortgage in mind
but the lender may or may not be willing to offer the homeowner this
type of loan. Lenders are more likely to offer fixed interest
mortgages to homeowners with good credit and adjustable rate
mortgages to homeowners with poor credit.
Consider the Lender
Homeowners will also have to watchfully consider the lender they
select. This is important because not all lenders are going to be
willing to offer the same interest rates and terms to the homeowner.
Homeowners may have to receive quotes from several different lenders
in a short period of time to make an accurate comparison. This is
important because interest rates can change without notice and
homeowners who wait too long to make a decision may find the rate
they were originally quoted is no longer available to them.
When selecting a lender the homeowner should also consider how
responsive the lender is to their questions. This is important
because a lender who does not pay attention to the homeowner or
respond to their inquiries in a timely fashion can make the process
of re-financing considerably more stressful than necessary.
Selecting a lender who offers slightly higher rates but is more
responsive may be warranted.
Consider the Cost of Re-Financing
Re-financing is not cheap. There are certain costs associated with
re-financing. These costs are typically very similar to the closing
costs associated with securing an original mortgage on a property.
These costs may include application fees, loan origination fees,
property taxes, appraisal fees and other miscellaneous items. These
costs can be quite extensive and homeowners may find they are often
left paying more than the benefits they are going to gain from
re-financing. In this type of situation the homeowner should make
the decision not to re-finance because it is not a financially sound
decision.
Consider the Hassle of Re-Financing
Let’s face it; re-financing can be an absolute hassle. The time and
energy spent researching different re-financing options and
contacting lenders to see who will offer the most favorable rates
can be quite taxing. A homeowner should consider the time and effort
required for this endeavor in deciding whether or not to re-finance.
Simply stated, refinancing is a hassle and homeowners may better
spend their time with family and friends rather than running around
trying to find the best rates in town.
ABOUT THE AUTHOR
Bob Schwartz, is a Certified Residential
Specialist, CA licensed real estate broker with
www.Brokerforyou.com. Bob
has over 27 years of residential real estate experience, authored a
number of published articles and served as an expert witness for
San Diego lawyers. You can contact
Bob via e-mail at bob@brokerforyou.com or visit his highly popular
San Diego real estate website at:
http://www.brokerforyou.com
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