Refinance or Not… What’s the Answer?
Refinancing your home may find hidden treasures you never knew existed. From saving thousands of dollars each year or consolidating high interest debts, to financing home improvements or renova-tions, you may find that refinancing is the solution to your problems.
Studies show that more than half of home-owners are either paying too much or are locked into mortgages that are unsuitable for their income level, their family’s needs or even for their financial goals. What many do not re-alize is what worked when they first purchased the home may not work now. Maybe now is the time to explore other options.
For instance, maybe your first mortgage is an aggressive Adjustable Rate Mortgage (ARM) and your rate will increase by a lot this year. You may consider refinancing with a fixed rate mortgage, which offers an interest rate that remains fixed throughout the life of the loan. Another alternative is an ARM with modest rate adjustments.
Before refinancing your home, educate yourself and obtain as much knowledge as possible about what mortgage products are available. Shop around and find the option that works best for you and your family’s financial goals. One of the dangers associated with refinancing is a lack of awareness. Be aware of what you want, and always weigh the pros and cons of every offer.
What is the cost of refinancing?
When you refinance a property, you are taking out a new loan. And when a new loan is established, you can expect to pay closing costs. Refi-nancing costs are similar to those when you first bought your home. Some of these fees associated with refinancing include appraisal fees, application fees and attorney fees, like title searches and title insurance. After explor-ing the costs involved, you may find that now is not the time to refinance, or maybe it fits into your financial goals perfectly.
