Refinancing Your Home - Is the Time Right?
Refinancing your home is a major decision not to be taken lightly, even in this era of low interest rates and easy money. While every mortgage company in town is touting the strategy of getting a new loan before rates rise again, there are several things you'll want to be mindful of before you go about refinancing your home.
In my view the key to refinancing your home isn't just the rate they're offering you: it's the total package looked at not only in terms of today, but a few years down the road. Many people have taken out new loans that really weren't quite right for their long term situations, thinking they'd be able to refinance again in the not-too-distant future. That may or may not prove to be true. No one has a crystal ball that'll give you a definitive idea of just where rates will be even a year from now, so try to approach this with a somewhat more long-termed view. It's very easy to get tempted by the prospect of easy, fast cash, but in the end you end up giving it all back in terms of higher payments, and worst case, be unable to make your payments and lose your home. Just look at all the costs associated with this new loan, determine what the payments will be in 2, 5 and 10 years, or whatever your timeline is, and make an informed decision unfettered by a mortgage broker's "opinion" what's "best" for you. They have a vested interest in getting you into a loan, any loan, and WILL NOT, repeat, WILL NOT, have your best interests at heart when you go about refinancing ......
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