Issues with Re-Financing
Is Re-Financing Worth the Hassle?
Some homeowners may never re-finance while others may re-finance all
the time. This is a decision which is principally a matter of
personal preference. Sure there are some financial benefits which
may result from re-financing but for some homeowners these benefits
are not worth the hassle of going through a mortgage re-finance. For
these homeowners the amount of savings overall or the opportunity to
lower monthly payments is simply not worth the effort of
investigating the re-financing options, comparison shopping for
lenders and paying closing costs to obtain a re-finance.
Are Some Homeowners Just Lazy?
Yes, let’s face it we have all stayed at a friend’s house to uncover
dust bunnies under the couch or unfolded laundry lying on the floor.
However, laziness is usually not the culprit when a homeowner opts
not to refinance despite the opportunity for an overall savings or
lower monthly payments. In these cases the homeowner may simply
decide not to re-finance because they are not confident in making
the right decision. These homeowners essentially decide they are
happy with their current financial situation and are not willing to
make changes which may or may not improve this condition. It is
likely that these same homeowners would re-finance their home if all
the work was done for them and they were guaranteed an improved
financial situation.
Do Some Homeowners Just Not Understand the Financial Benefits?
This may be true also. Homeowners who do not wholly understand the
potential savings which may be involved in re-financing are not
likely to undergo the re-financing process. For these homeowners it
may seem as though the efforts are not worthwhile for the benefits
that are received. If the homeowner had a clearer understanding of
the situation they might have a different opinion but in this case
the homeowners may be unable to comprehend the ramifications of a
re-finance.
Reflect on the factors involved in re-financing. Most of the
equations used to validate the benefits of re-financing are
relatively complex. There are calculators available online which
make it extremely simple for homeowners to enter the known
information and obtain the desired results. However, these
calculators typically do not explain how the calculations are
performed. This can make it hard for some homeowners to simply
accept the results produced by these calculators. When this is the
case the homeowner is not likely to be inclined to automatically
accept the results generated by these calculators. Additionally, the
homeowner may not consider re-financing until they are able to
confirm these calculations. Depending on the homeowner’s
mathematical skills, this could be either a short process or a long
process.
Can You Convince a Homeowner to Re-Finance?
This is a difficult question to answer for the reason that it
depends on a number of factors. Some homeowners may be extremely
trusting and may be convinced to re-finance with little effort at
all. Conversely some homeowners may be quite guarded in terms of
their financial situation. These homeowners may be suspicious of
claims that the re-financing can improve their financial situation.
These suspicions can make it extremely difficult for a homeowner to
be convinced to make a change. Once suspicions begin to develop the
homeowner may either seek out more information on the subject or
become less receptive to additional information. While one case may
lead to the homeowner being more likely to be convinced to
re-finance the other case will likely make him less willing to
re-finance.
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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