Refinancing Your Home - Is the Time Right?

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 your home.

Some things to consider when refinancing your home would be the type of loan, (fixed, ARM, etc.) the rate, the term, the costs associated with the loan, any cash equity you'd like to take out, and the time and documentation necessary for refinancing your home. This is a wildly competitive market, and please do yourself a favor and shop around. The same loan one lender will offer you can vary greatly from another just down the street as far as total costs go. Don't be afraid to say no: they're not doing you a favor by "giving" you this loan. They're reaping many thousands of your dollars in interest, so make sure you get what you want, not what they want to sell you. Remember, you're refinancing your home, not their summer vacation!

All in all, when refinancing your home, take your time. Shop around, compare, and you are the customer, and what was that they say about the customer always being right? You are, as long as you do your homework when refinancing your home.

Keith Thompson is a real estate investor and webmaster at Mortgage Loans Today where you can find more information and resources for refinancing your home

Credit's Tight, but Time's Right for Refinancing (WGHP Greensboro)
HIGH POINT, N.C. (WGHP) -- Turmoil in the financial industry and the tightening of credit has made qualifying for a loan more difficult than it was just a couple of months ago. But for those with good credit and plenty of cash, the Federal Reserve's decision Wednesday to cut a key interest rate is good news for people with home equity loans or homeowners interested in refinancing.

Using equity to pay debt can be risky (Bankrate.com via Yahoo! Finance)
Using a refinance to pay down credit card debt can be risky, the Debt Adviser says.

Political action leads to rebound in global markets (CTV.ca)
World markets bounced back Monday following last week's massive stock sell-off. The rebound occurred as U.S. and European leaders intensified their efforts to ease a credit crisis that has shaken global economies.

Homeowner help: HUD-certified advisers, more refinancing available (Modesto Bee)
Whether their home loan is through Countrywide, another mortgage company or bank, homeowners can get free counseling to help them avoid foreclosure.

Eviction looming, man sues over deal (Asbury Park Press)
Michael Moreno had a decision to make — fast. There were only hours to go before his home was to be sold at a sheriff's auction.The 47-year-old Little Egg Harbor resident could lose the house —

Mortgage crisis has turned homeownership upside down (Chicago Tribune)
Homeowners drowning in mortgage debt Joey Goldner always approached real estate with a gardener's zeal. He'd plant his money in a building, patiently care for it and watch its worth grow. For 30 years, it was a brilliant avocation—right up until the heavy thud of the housing market helped flip Goldner's mortgage upside down.

McCain's Mortgage Plan Calls for Lowering Rates for Homeowners (Bloomberg)
Oct. 10 (Bloomberg) -- Republican John McCain 's plan to refinance distressed home loans includes cutting mortgage rates to just above 5 percent for troubled borrowers, an adviser said.

Using equity to pay debt can be risky (Bankrate.com via Yahoo! Finance)
Using a refinance to pay down credit card debt can be risky, the Debt Adviser says.

     

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